The current large inventories of finished leather held by Asian tanners, combined with a weakening world economy, are thought to be behind the dramatic fall seen in New Zealand skin prices in recent months.

According to the ANZ Bank’s World Commodity Price Index for October, skin prices fell by 23%, recording the largest single commodity decrease in the index for the second month is succession. "Stocks were built up through the chain from tanners to retailers over this period and tanners in Asia now hold large stocks of finished leather", the bank said. With only intermittent buying from China, the wool index also fell by 7.4%

Compared with September, the ANZ fell 2.4% and is now 4.6% higher than October a year ago.