ICHSLTA reviews expanding world trade

12 July 2007

President of the International Council of Hides Skins and Leather Traders, Pierre Bonefant, told delegates at the annual ICHSLTA meeting in Hong Kong that world trade and exchanges, helped by the internet, are rocketing with an ever expanding 'cost-orientated' demand. He said: 'China, with its ever-increasing manufacturing capacity, is answering the challenge, encouraging and initiating an uplift of its national standards of living.' Bonefant described the nine east coast provinces, along with Beijing and Shanghai, as 'windows of Chinese development' which are now expanding, within a 'Go West' policy, to Sichuan province. Cities of heavy industry and high technology are booming. But China is now faced with subsequent problems which are linked to its tremendous growth, including lack of infrastructure, energy shortages and environmental pollution. Bonefant said he believed that the upcoming Olympic Games in 2008 will compel the Chinese government to focus on pollution as a major concern. This should result in a degree of constraint over tanning 'within imposed legislation, thus giving a chance to existing tanneries in South Korea, Taiwan, Indonesia and low cost emerging countries, environmentally less sensitive, like India, to operate.' In contrast to '2005 where demand and supply were balanced and steady, 2006 has been a 'sellers market' with demand exceeding supply. Leather orientated fashion trends increased leather demand. All this resulted in a sustained strong market where prices have been rising, especially over the second half of the year', with December closing with a 20% global increase in prices. Unfortunately, the leather market, despite tanners' efforts to recuperate, only took part of this rise, squeezing the tanner's margin and increasing the market risk. Looking at supply, he said 'the US herd is steady at around 96 million. Although there were some meat market difficulties with Japan and South Korea, with the overlap of the BSE crisis, slaughter has been stable. But forward export sales showed 8-10 weeks of production never seen before.' Exports to China reached 50% of total production, evidence of the incredible expansion of the Chinese tanning industry, which was helped by a sharp increase in domestic demand. He concluded by saying: 'world hide production in all species is around 4.5 billion. This leaves room to advertise and encourage the use of our contracts No 6 and 7.' China: the workshop of the world GDP 10.7% in 2006 Foreign exchange reserves of $1,000 billion A commercial surplus of $177 billion

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