Argentina: Raw and wet-salted leather prices up since devaluation
Argentinean raw and wet-salted leather prices have risen in peso-terms by 60-80% since the currency's devaluation last month. Prices peaked several weeks ago and have since fallen around 20% but are unlikely to drop further considering the 10% and 5% duties imposed by the government on exports of agricultural and industrial products respectively.
Prices for chemical products, machinery and other equipment used by tanners - even those produced locally - have been kept in US$ strongly reducing the advantages of the devaluation. Limitations imposed by the government on the availability of money deposited in banks means tanners' operational costs are increasing along with cashflow problems as they are forced to pre-pay their purchases or buy cash-on-delivery. Credit has virtually vanished in the country, causing problems for tanners who have to pay for raw materials long before the tanned leather is delivered to the customer.
However, in spite of all the financial difficulties facing businesses in Argentina, the largest tanneries are still managing to deliver their products to international customers and honour export contracts.
