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Bulletin

Brazil – Green hide prices running out of control

Published: 13 Jan, 2021

The latest CICB green price indicator has shown that for the first full week of 2021, prices have rocketed in value. The price for green hides now stands at BRL1.48/kg, a rise of 12% from the previous week, when prices stood at BRL1.32/kg. Any hope that the short flatline in prices would continue into the New Year has gone within days. One commentator describes the prices as now completely out of control, and unworkable in a way that can return any sort of margin. The local currency has conceded some ground against the US$, but this really is a very small bonus, especially when shipping rates have eaten up most of this gain. To put things into perspective, the price for green hides is now three times the price it was back in the summer of 2020, and 72% above the price of just ten weeks ago. Unlike the recent price rises, which were high in some regions but more modest in others, this time around all the major hide processing regions of Brazil have shown large price rises. Wet-blue prices have risen in value recently, but there is just no way there is enough demand from China or domestically to support rises that come anywhere near close enough to support the green prices. It is well known that the margins are generally created when buying material, not when selling it, and the same can be said for the losses, which is now the case within Brazil.

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