Hide market crash and its influence on trade18 November 2009
Ron Sauer and the organisers of the Hong Kong show (APLF Ltd) hosted an open seminar at the recent APLF at which tanners and hide traders from around the world were invited to give their views on the state of the market today. The seminar, Hide Market Crash and its Influence on Trade, took place on April 1. Below are extracts from Sauer’s speech in which he urged the new world players to bring the industry together
Chinese, American, Brazilian and Indian participants at the seminar all expressed their anger, disappointment and frustration with regard to the unsatisfactory conditions surrounding international trade since last October and which are still in effect today (see table 1). There is disrespect for contracts, the impossibility of enforcing them and a general lawlessness.
No changes can be made and no solutions can be found without showing the preparedness to sit down and talk. This was the positive outcome of theSauerReport meeting. All admitted they have been and still are suffering and losing money due to the present state of affairs.
Ron Sauer said: ‘As a trade we must admit that we, the buyers and the sellers, have made a mess of our business. We have not followed the rules and conditions we have established for ourselves in the international contracts; contracts, which many now say are not worth the paper they are printed on. We have invented stale bills, accepted credit clauses which are totally irresponsible, played around with product descriptions, falsified documents, you name it! And there is nobody else to blame but ourselves’.
‘We have two international organisations which many say have proved useless and powerless. We forget that nobody ever supplied the resources to these organisations to actually, seriously and usefully execute their job. Why not? Because we don’t want to pay for it!’
‘Now many of us are in trouble. And not surprisingly. When mentioning this meeting, many reactions were: ‘useless, forget it, nothing will come of it, waste of time, it’s everybody for themselves, no contract or association can help me, etc, etc’, he said.
‘I challenged these reactions by stating that if they were right we were actually admitting that our leather business was beyond all solutions and could only exist in total disarray with no hope at all. This means that the global problems in the financial world and in the car industry are nothing, peanuts, in comparison with what we are going through in the greatest of all, the leather trade!!!.’
‘I have no problem in criticising existing organisations and contracts. We must be realistic and admit that the present contracts no longer seem to work and the same counts for our trade associations. The proof is that ever fewer people use the contracts and that ever fewer people wish to be a member of an industry association. If they don’t work then let us get rid of them, change them or create a new one. This is where we are now. The present contracts are very dated. They were put together mostly by countries which no longer play an important role in the trade.’
‘The giants of today were never involved in the conception of the contracts and have been saying for a long time that they don’t agree with much of what is in them. I guess they have the right! What is the use of pushing a contract that many refuse to accept? We have no choice but to create contracts that all parties agree and can live with.’
‘The same counts for our two major trade associations ICT and ICHSLTA who have agreed to restart discussions to consider possible changes to the International Contracts 6 and 7. What about one new association working for the interest of the global trade and industry in the widest sense and in which buyers and sellers are equally represented?’
‘The raw hide and skin trade alone is estimated at over $5 billion a year. I think our business deserves a professional, independent association to protect and promote interests, to assist in resolving problems, to create contracts and general rules of behaviour, to supply guidelines, to publish possible solutions to general problems. There should be a permanent office working full time with the means to do so. The financial resources should come from national associations who, after all, are the only ones able to collect funds in their own countries and to stay in touch with governments and organisations where needed or useful.’
‘There should be clear advantages for an industry player to be a ‘paying’ member of his association and clear disadvantages for those who are not willing to join. It cannot work otherwise.’
‘The Brazilian leather association CICB has already offered to host a next meeting at their leather fair in Sao Paulo in January next year. But January is far away and the problems are here now. I think it is up to the existing national and international associations to take the next step and to take it NOW.’ n