Positive figures mask pain for Brazilian tanners
06/07/2011
The total value of leather exports for the first five months of 2011 is $888.9 million and the cumulative volume 12.5 million pieces. These figures represent increases of 25% and 7% respectively on the first five months of 2010.
However, Wolfgang Goerlich, president of the Brazilian Tanners Association (CICB), said the positive result masked the difficulties leather producers in the South American country were facing to stay competitive.
“Our domestic market is saturated,” Mr Goerlich said, “and cannot absorb any more material. Tanners are, therefore, being forced to focus on overseas markets and are suffering because of the well documented negative effects of the high value of our currency compared to the US dollar. Tanners are being forced to work with margins that are very narrow and, in some cases, negative.”
Passing on increased raw material costs has been impossible for tanners, the CICB president continued. Having to pay more Brazilian reals for hides while bringing in fewer US dollars for the leather they produce is severely hurting export-focused tanneries, he said, especially as many tanneries are finding it very difficult to secure extensions to their credit facilities.
In spite of this, the Brazilian leather industry has been able to maintain a presence in overseas markets that it has worked hard to conquer over many years, and in some cases opened up new ones, Mr Goerlich added. China, Hong Kong and the US continue to be the main export markets for Brazilian leather, but shipments to Germany, South Korea, Mexico, Norway and Hungary have increased substantially in the last year.
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