Hide price crash fails to materialise11 March 2010
Previous fears of a crash in hide prices were unfounded as the hide market continued to surge forward during November and December. Indeed hide prices are now higher than before the last crash with no apparent end in sight to the price increases.
The main reason for this surge in prices is reported to be due to demand from China for upholstery leather. The shoe and leathergoods sector are said to be relatively quiet and demand has been for the heavier hides. China has posted a November year on year increase in industrial production of 19.2%. This is the fastest increase in two and a half years and the demand for hides is reflected in these figures.
The doomsday merchants are now predicting the slump in hide prices to occur around the time of the Chinese New Year. However, despite China being a driving force in the hide market revival, it is not the only player in town and demand from other producers has also been solid.
Admittedly they do not want to pay the same prices as the Chinese but to get hides they have to and are doing so.
This has been evident in the interest in chilled hides from mainland Europe which had been absent for over a year at least. This has caused the tanners in the UK some angst as they have had to play catch up with the market.
On the supply side kills have been lower than expected partly due to the high price of red meat against the low price of white meat. It is also partly due to the shift in slaughterhouses killing animals that they can sell as opposed to merely maintaining their market share.
This has been a feature of the kill throughout Europe. Consequently there has been a scramble for hides that has driven up the raw prices at a faster rate than the rise in the
salted market. History just keeps on repeating itself.
The hide prices had risen to the following levels at the beginning of December:
36 kg+..............................80p ($1.09-$1.13)
31/35.5 kg.........................85p ($1.22-$1.24)
26/30.5 kg ...90p ($1.33-$1.35)
Cows were sold at £21 ($33). All prices are ex yard. Fellmongering skin prices also increased as the wool length got longer. Irish skins went for £2.50 ($3.9) and English skins went for £3.20 ($5) ex yard.