Brazilian hide exports boom as European supplies dry up
The European foot and mouth disease crisis has lead to a boom in business for Brazil’s hides and skins trade, which exported 23% more hides in January and February than it did in the same period the year before.
Prices have also gone up by 20%, though this is not entirely due to the South American country’s new-found favour in the international marketplace. At around the same time the first FMD outbreaks were making the headlines in the UK, Brazil was experiencing problems of its own, mainly because of a NAFTA (North American Free Trade Area) – inspired BSE scare.
During February, the association said it suspected that some Brazilian cattle herds were contaminated with the disease, and threatened to ban all imports of Brazilian beef. Though it has yet to be realised, the threat was enough to throw the market into turmoil. Faced with the prospect of an export ban, meat packers cut back on production and put up their prices, and it is partly as a legacy of this situation that prices remain so high today.
In January, Brazilian green hides were R$ 1.45 (US$ 0.73) per kilo. Last week, prices were 38% up on this figure to R$ 2.00 (US$ 1.00), and all the signs are they are going to climb even higher as confidence returns to the marketplace and Europe’s shoe, car, garment and furniture manufacturers are compelled to look ever further afield for their supplies.
Europe’s problems have been equally good news for Brazil’s tanners. Despite the increase in raw hide prices – and the imposition of a 9% duty on all wet blue exports last December – export business is thriving.
