Wet-blue exports up 10%

Brazilian exports of wet-blue for September 2000 showed a 10% increase over the same period in 1999 while exports of higher added value articles, namely crust and finished leather, have seen a fall of 46% and 11% in exports, respectively. From January to September, Brazil exported 197.3% more wet-blue hides than in the same period of last year. According to AICSUL - Association of the Tanning Industry of the State of Rio Grande do Sul - during the first three quarters of the current year, the country exported 10.8 million pelts for a total value of US$531.2 million. The total growth for this year so far is 1% in number of hides and 25% in turnover. Jose Roberto Scarabel, president of CICB - Centre for the Brazilian Tanning Industry, explains that because the government has decided not to tax wet-blue exports and Europe, one of Brazil's main raw material buying markets, taxes imports of crust and finished leather at 6.5%, exports and imports of wet-blue have been stimulated. Mr Scarabel points out that the tanning sector offers the highest number of vacancies within the Brazilian industry in general but, at the same time, it implicitly exports the highest number of job opportunities together with its raw material. It is estimated that if the 7.4 million wet-blue hides exported from January to September had remained in the country, 186 thousand jobs would have been created in the tanning and allied industries. Also, the income for the country would have been much higher if the production and trade of higher added value articles had been encouraged. Although crust and finished leather account for 30% of Brazil's total leather exports, financially they represent 45% of the trade turnover in the importing countries. Crust and finished leather exports keep falling. The drop started in May for crust and in June for finished leather. Scarabel is sure the drop will continue. There are two main reasons for this adverse result: the lack of competitiveness of the Brazilian product in the international market if compared with that of other supplying countries and the delay the tanners have experienced in getting back their tax credit. 'Nobody wants to export and have their credit retained', explained Scarabel. 'The whole process is still very slow and tanners must wait for over 90 days to get their money back', he added.