Brazil – Green prices becoming unsustainable
Published: 11 Nov, 2020
For week 45 of 2020, the green price indicator in Brazil has shown an alarming upward price trend is continuing. In recent updates we have seen the price gain in large increments week by week. The price now stands at an average of BRL1.04/kg, with price gains being reported in all regions of Brazil. The situation is now becoming an acute one for hide dealers and tanners alike, who have witnessed green price increases that have leapt way above the smaller rises of the selling prices, this for either raw or wet-blue material. It is true that that there was some slack in the trade had to be taken up, when the selling prices raced on and green prices remained static in the early months of the Summer,
the slack was taken up many weeks ago. Unless the raw and wet-blue selling prices increase, then tanners are facing a problem with procuring Brazilian hides in the required volumes at workable prices. Many tanners have already started purchasing more hides from neighbouring countries to fulfil their needs, but with the inevitable outcome of increasing green prices in those countries, too. Most commentators would agree that the current problems will not be alleviated until the slaughter rates start to increase; this however, does not look forthcoming. As it stands now, both the green price and the selling wet-blue prices are around 30% higher than the low points of 2020. The problem is the green hide prices are rising much faster. For week 45, wet-blue prices for the top tier TR1 rose by just over 1%, however for the same week green prices rose by over 7%. To read more click here.