Prices – not disease – drive down Brazilian leather production
The recent surge in the number of Foot and Mouth disease outbreaks in Argentina, Brazil and Uruguay has forced breeders in the affected areas to slaughter a small number of animals and vaccinate their herds
In contrast to the European counterparts, some breeders - especially owners of small rural properties – have said they think the vaccination programme should never have been dropped in the first place as it guarantees a healthy herd.
In Brazil, the new situation has generally not affected the supply to hides to the tanneries, as reflected by the slight decline noted in prices in recent weeks.
In the state of Sao Paulo, green hide prices fell again at the beginning of the week commencing May 21. Prices ranged from R$ 2.00 (US$ 0.854) to R$ 2.10 (US$0.879) for cash payment and from R$ 2.05 (US$ 0.876) to R$ 2.15 (US$ 0.918) for payment at 30 days. Wet-salted hides were being negotiated at R$ 2.70 (US$ 1.153).
Slaughter numbers have remained stable and yielded good volumes. However, and increasing number of tanneries are now reporting that they are cutting back on production - the main reason being the high prices being charged for leather in recent months, and the negative impact this has had on retail sales.
Against this backdrop, prices are expected to continue falling in the short term. Slaughter numbers should remain stable and the high offer in the local market can be expected to force prices down.
