Rain follows drought

Speaking at the ACLE in Shanghai, China, John Gorman, Aries Victorian Sheepskins, told Leather International that there was good interest from China, Australia's biggest trading partner in sheepskins. The continuing drought in central New South Wales had led to the country's lowest flock for 50 years (18 million). Substantial rains will now mean a reduction in the number of sheep coming to market as farmers attempt to rebuild stocks. Lambs, which are bred for meat, come forward for slaughter regardless but the sheep market fluctuates according to price/ weather/demand. Australian shippers were quoting prices to China which Gorman described as fully firm on an upward trend. They are finding some over-buying while others resist, which could mean a shortage of supplies when they are finally ready to buy. There were 16 Australian hides and skins companies at the ACLE which is regarded by them as the major fair for anyone who believes China is an important market. Victor Topper, AI Topper & Co Pty, said that the hide market was extremely firm with domestic prices expected to remain stable through to the end of the year. A major problem at the moment is that Australian meat exporters have utilised all their current meat quota to the USA so that slaughter numbers will be virtually on a hand to mouth basis until the end of the year. Drought in New South Wales created a short term increase in slaughter numbers. Production numbers are still an issue, creating an anomaly with domestic wet-blue producers still needing to take hides to satisfy their production volumes, irrespective of cost. Some tanners have contracts with abattoirs to handle their entire throughput and this insulates them against artificially inflated prices.