Hide Exports Increase But Value Falls

AUSTRALIA - Australia exported 37 per cent more cattle hides from January to the end of October this year than the same time a year earlier. The biggest market by far was China, which took over three quarters of all hides, while Thailand, Hong Kong and Italy also received large volumes due to the large leather manufacturing industries in each of these countries.
calendar icon 23 December 2009
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Meat & Livestock Australia

According to experts at Meat and Livestock Australia (MLA), despite the higher volumes, the value of hide exports over the period was back 38 per cent year-on-year to $180.6 million.

Although a fluctuating exchange rate played a role – the A$ averaged 14 per cent lower for the period January to October this year (Infoscan) – the fall in value was mainly due to a steep drop in the prices paid for all hides, brought about by the collapse in demand for leather goods following the global economic and financial crisis.

Slowdowns in the US automotive industry and the quality apparel and fashion market in Europe caused demand for Australian hides – and hence prices – to plummet. Hide values crashed to a low around March 2009, leaving many traders and processors with large stockpiles, before recovering slightly in the second half of this year.

Ex-works green hide prices have averaged around 75 per cent cheaper over the same period this year (January – October) in Queensland, and around 67 per cent cheaper in New South Wales (MLA’s NLRS). Processed hides have fared a little better, with eastern states wet-blue hides averaging around 35 per cent cheaper than the same time a year earlier.

Currently, although hide prices remain depressed, they have improved significantly since the beginning of the year, particularly for better quality heavier pieces. Prices have been supported by tighter supplies, with adult cattle slaughter down two per cent and calf slaughter back five per cent for the period January through October, as well as a general improvement in market sentiment, and renewed enquiry from Chinese tanneries.

TheCattleSite News Desk

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