Sheep and lambskin prices have fallen sharply and the current forecast is that prices will remain at the same level until February/March, according to the latest Meat and Livestock Australia (MLA) report, which added that shorter wool length and heavy weight lambskins were holding firm but all other grades easing. MLA stated that this fall was due to weaker demand in Türkiye and Russia which are sourcing cheaper alternatives, and the on-going rise in value of the Australian dollar.
Connor Fitzgerald of the National Livestock Reporting Service said in an interview: ‘Sheepskins have been hit particularly hard as demand from Australia’s largest buyer, China, has fallen as they currently have a huge surplus. Alternative cheaper sources of skins, particularly from the EU and UK, are available but the quality was not equal to Australian skins. With most Australian skins traded in US dollars, the rising Aussie dollar means that sheepskins are now $16-$17, with heavy Merino skins at about $19.’
Leading Australian lamb and sheepskin exporter John Knox of Knox International, Victoria, agreed that the high dollar, now at 76 cents (US), contributed to the downward pressure on prices, almost 5% in November alone. He added, however: ‘Seasonal conditions also had a part to play in the decline in lambskin prices. The problems with grass seed and burr have started. Whether it has gone through the wool and is embedded in the skin, or it has created scar tissue, it means the leather side of the skin is unsuitable for suede and will take a price cut as a result. Unblemished skins would retain their market value.
‘Although seed scarring was expected at this time of year, it meant the area from which export quality skins was drawn was dramatically reduced nationwide. The long-term market for lambskins continued to be strong because Australia has a greater range of markets and products.’
