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A careful watch on green prices

Published: 11 Nov, 2020

Recently, we dared to write about the demand for hides outstripping the supply of hides. At the time of writing, this was good news for suppliers of both cured and wet-blue hides, who had witnessed price rises on both fronts, while still being able to procure their hides at advantageous price levels. Suppliers in Brazil, and the U.S. were able to secure each new contract at ever higher values, while some of the larger Australian suppliers even stepped away from the market to watch their stock values grow, then stepping back into the market, to cash in. But now that same lack of supply is starting to hurt many suppliers and wet-blue tanners. In almost all countries aside from the U.S., slaughter rates have been well below the normal levels expected for this time of the year, with the lack of restaurant trade around the world along with consumers cutting back on expenditure meaning that cattle going to slaughter is reducing in many origins. We only have to look towards Brazil to see how worrying the recent trend has become; here, both cured and wet-blue sales have reached what many feel is the ceiling for hide prices in China. There is only so far finished leather prices can go, especially with only one market (Chinese domestic) driving the business forward currently. Yet, in Brazil, green prices have hit levels not seen for 18 months, and in the last week alone there has been a rise of 11%. As yet, there are no other reports from around the world that prices have risen as they have in Brazil, but other countries are starting to report increases. Without an increase in slaughtering, which does not appear to be forthcoming, hides look likely to remain in shorter supply, until the world can return to some form of normality.

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