Kills low in Europe17 November 2009
Kills have been low over these last two months in Europe but are running at the seasonal high levels in America, and yet we have seen an increase in prices from tanners and also traders who deal in the Far East.
The general reason given for this increase is that all stages of production have now reduced their stock levels to the absolute minimum and as customers place fresh orders the tanners need to source fresh stock.
There have been reports of large volumes of American hides sold at higher prices both in Asia and, notably, Italy. This gives fresh hope to hide dealers that the bottom has been reached but there is a body of opinion that the corner has not necessarily been turned. In the UK and Europe government backed scrappage schemes for ten year old cars appears to have provided a much needed boost to car sales and perhaps this is one factor helping keep demand for hides on the increase.
More remarkably perhaps is that these rises have taken place against currency movements that work against the increase in the price of hides rather than for them. This is what gives hope to the hide dealers that the increase in prices is not a dead cat bounce.
However, before we all get carried away with ourselves, the increase in selling price means that in reality hide processors have moved from a loss making position to a break even situation. To get into profit hide processors will need to achieve better selling prices whilst maintaining their purchasing price at current levels.
The shoe leather producers have had the ball at their feet for quite some time now but it is the interest from other sectors that is driving the market. Any stalling in this added interest could easily reverse all the recent gains. Prices edged slightly higher and were as follows:
36kg+ 42p ($0.62)
31/35.5 48p ($0.71)
26/30.5 55p ($0.81)
Cows £13.50 ($19.98).
The old season hogget kill continued pretty much as before in terms of animals killed but prices did decline on the back of lower demand. There is still no market for new season lambs as there are insufficient numbers to make a load yet.
Finally the first new season lambs have arrived on the market and the first Irish lambs were sold for £2.50 ($3.70). These were the first kill and are considered to be small with short wool length. However, the next batch of lambs are up to full specification and the English skins were sold for £2.50 and it is expected that there will be a quality differential of up to £1 for Irish skins which would make them £3.50 ($5.18). This is where the offers are.