Leather Pipeline: Calls for a regulated hides and skins exchange
In this week’s exclusive Leather Pipeline report, we hear that contractual issues are mounting as the lack of leather demand has meant some tanners have been unable to honour contracts.
While hides sales in the US looked robust last week, some are questioning whether these were “new” sales, or were just hides that are being sold second or third time around.
This has led to renewed calls for a members-only trading platform or a mercantile exchange.
“The membership has to be paid for, there will be a board to regulate the trade and anyone who fails will lose membership,” suggests the author. “We know there are many arguments for and against but only an internationally regulated forum where buyers and sellers are known, the trades are registered and members have to provide certain security deposits in relation to their intended trading volume can really offer the necessary tools to control performance.”
European suppliers hope that before the end of August, Asian tanners will have to replenish stocks, but they might be disappointed because there are better options in other regions.
“The situation is difficult because there is no market,” the author continues. “In international terms, we might be trading less than 50% of the raw material produced.
“The main challenge is reading how the leather demand will develop. This is particularly important for the commodity leathers which have lost so much market share to alternative materials. It is unclear if and how quickly leather can regain some or all of the consumption that has been lost.”
Read the full report on the Market Info page, where we also look at the markets from a German and US perspective.
