Prices in all major selections rose sharply over the Christmas and New Year period following the announcement of a single case of BSE in Washington State on December 23. Hide markets reacted quickly to concerns over declines in American hide supply and pushed up prices. For example, heavy Texas steers rose from $67 per piece on December 21 to $72 by early January. However, the hide suppliers did not have everything their own way as many tanners, especially in Asia, resisted pressure to enter the market. Chinese and Taiwanese tanners stayed away in early January while prices remained high. Industry analysts were anticipating price declines in early 2004 before the BSE story hit the headlines and the reverse took place.

Korean tanners were the first to enter the market in the New Year which kept prices at the raised level. However, with the Chinese and other Asian countries out of the market prices were expected to fall towards the middle of January. This should benefit the Koreans the most. Despite the fall in supply low demand has meant that overall prices have risen in the short term and will most probably fall in latter weeks of January. Prices are only likely to rise if the BSE situation gets worse but early indications show that a repeat of the crisis which affected the UK will not be repeated in the US.

US hide exports to Thailand were suspended at the end of December due to the BSE outbreak. The Thai government halted all imports of US beef and cattle byproducts’ including hides. This caused many containers to be diverted to other countries. This caused major problems for both hide exporters and Thai tanners. Leather industry bodies are working hard to persuade the Thai government to see common sense and allow imports of US cattle hides in.

Federal inspected slaughter (FIS) averaged 610,750 for the four-week period from December 7 to January 11, excluding the holidays. The figure for the same period last year was 190,000 head higher averaging 658,250 per week. This year’s figure is down 7.2% compared with 2003. China was once again the major export destination for US raw hides. China directly took 439,600 pieces with Hong Kong (71,300) and Taiwan (56,500) also taking significant quantities. Therefore, the figure for greater China was 567,400 pieces. As usual South Korea was the second most important buyer of US salted rawstock taking 352,700 hides over the same four-week period. Other significant purchasers were Japan (97,000), Mexico (87,300), Canada (24,800), Italy (9,900), Dominican Republic (8,300) and Vietnam (4,800). Italy also took 37,201 salted calf and kip skins during the week of December 21.

Although sales of wet-blue averaged 101,750 for the four-week period from December 7 to January 11, a mighty 202,600 pieces were sold during the week ending December 14. The other three weeks saw significantly lower volumes of wet-blue sold. Especially, after the announcement of BSE in the US. Sales of wet-blue for the first trading week of the year were only 35,000 pieces. Major buyers of wet-blue included China, South Korea, Italy, Hong Kong, Mexico, Taiwan, Dominican Republic and Spain.

Sales of wet-blue splits rose and fell continuously during December. The first and third weeks of December witnessed sales of 2,502,000 and 1,471,300lb. The two remaining weeks witnessed sales of only 315,900 and 336,000lb. Italy bought 1,200,000lb at the beginning of December followed by China with 870,000lb. Hong Kong purchased 1,177,000lb during the third week of December. Other major split buyers were Mexico, Taiwan and Spain.