German Perspective – 07.01.20
07/01/2020
The attacks came from different directions. Plastic alternatives have improved in quality and appearance and offer much easier and cheaper manufacturing options. At the same time campaigns against leather as an animal product intensified. Then there were general economic issues such as the trade war between China and the US and the uncertainties linked to Brexit. All of this combined to make the general environment for the production of leather and the sale of hides and skins increasingly difficult.
In the first nine months of the year the market went only one way, and that was down. This amplified the problems because barely any leather producer was willing to buy more than the absolute minimum required to keep production afloat. The surplus of raw material which had already built up began to become a serious burden and the lowest-quality hides and skins were either dumped into the market or even destroyed. A great number of hides and skins were sold in 2019 well below their collection and processing cost. Nothing can really have a long-term commercial future under those circumstances.
As hard as this has hit European origins, it is still the case that in the global quality range we still hold a position that allows almost every hide to secure a workable return. However, the global balance between supply and demand has been significantly disturbed. In the last quarter of the year hide demand recovered moderately, because the long term wait-and-see attitude had reduced stocks in tanneries and also because, even if late in the day, some leather demand returned. Some people tend to believe that this could be a turning point, but this might be premature. We are in the winter season, which is the busy time for leather production. Stocks have to be replenished and lifted to adequate and balanced levels.
The big question mark remains how sustainable the trend his going to be and to what extent the present dynamic can be carried over into the next seasons. This depends entirely on the decisions of the manufacturers, brands and retailers. Are they really willing to put products made from leather back into the production lines and shop windows?
Business activity in the build-up to the holiday was extremely limited. European buyers were were quick to clear their desks and, before Christmas, the majority had purchased enough material to last until well into January. From Asia we received quite a number of enquiries in the week leading up to Christmas, but most of it was the usual bottom-fishing of customers who were hoping that the holidays would make sellers willing to take lower bids. We were not willing to join the party and that left us with almost no business really to deal with.
The kill: There was another decent week of slaughter and heavy weights in the week before Christmas, before two weeks of almost no production. Cold stores were well filled.
What we expect: It might take until the second week of January before real trading resumes and there is little reason to believe we should start 2020 at different levels from the ones at the end of 2019. We hope all our business friends had a merry Christmas and a happy new year.
| Type | Weight range | Avg. green weight | Salted weight | Avg. weight salted | Price per kg green weight | Trend |
| Ox/heifers | 15/24,5 kg | 22,0/23,5 kg | 13/22 kg | 20/21 kg | € 1,20 |
Stable |
| 25/29,5 kg | 27,5/28,5 kg | 22/27 kg | 25/26 kg | € 0,70 | Stable |
|
|
Dairy cows |
15/24,5 kg |
22,5/23,5 kg |
13/22 kg |
20/21 kg |
€ 0,70 |
Stable |
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 0,60 |
Stable | |
|
30/+kg |
33,5/35,5 kg |
27/+kg |
29/31 kg |
€ 0,55 |
Stable | |
| Bulls | 25/29,5 kg | 27,5/28,5 kg | 22/ 27 kg | 25/26 kg | € 1,15 |
Pressure |
| 30/39,5 kg | 36,0/37,0 kg | 24/34 kg | 31/33 kg | € 1.15 |
Stable |
|
| 40/+ kg | 45,0/48,0 kg | 34/+kg | 38/40 kg | € 1.05 |
Stable |
|
| Thirds | 15/+kg | 25,0/27,5 kg | 13/+kg | 24/26 kg | € 0,27 |
Stable |
| Thirds bulls | 30/+kg | 38,0/40,0 kg | 24/+kg | 33/36 kg | € 0,40 |
Weak |
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