Turkish tanners prefer to cut production than pay hide prices
05/03/2014
Companies including shoe upper specialists Gerede, Bor and Bursa have reduced production capacities by more than 50%, according to local reports, saying they would review the situation in May or June and increase their finished leather output again if the raw material situation improves.
Local currency, the lira, has lost 10% of its value against the dollar and the euro in the last two months. While this makes material produced in Turkey attractive to buyers in external markets, it has also led to a sharp increase in the prices of imported goods and services.
Reports on the ground say leather chemical prices have not yet been affected, but the price of hides has. Turkish tanners have said the price of imported hides has gone up in recent months by around 30%, because of a combination of currency fluctuation and rising prices.
And because the quality of imported hides is sometimes inadequate, Turkish tanners say, demand for domestic wet-salted cattle hides is very high, making the local raw material hard to find and also more expensive. With high prices and lower quality in imported hides, tanners such as the three named above have said they prefer not to buy and to cut their production instead, at least for the time being.
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