Brazilian wet blue exports up
Brazilian wet blue exports keep growing after the reduction seen in the wet blue export duty from 9% to 7%, by the country's Chamber of Foreign Trade (CAMEX), a few months ago. The duty was created in December 2000 in order to slow down the export of raw material, guarantee domestic supply and encourage production of higher added value leather, namely crust and finished articles. But in December 2004, against the advice of most Brazilian tanners, CAMEX decided in favour of gradually reducing the duty until its complete elimination in 2006. This followed pressure by powerful cattle slaughterhouses and meat packers who operate wet blue tanneries and who are not at all worried with the resultant damage that will be caused to the local leather value chain. They take the view that they are in the business of producing beef and hides are just a by-product.
So, the current situation is alarming to tanners in general. According to Secex - Brazilian Foreign Trade Department, and AICSul - Association of Tanners of the State of Rio Grande do Sul, the volume of wet blue exports grew 26% in the first quarter of the current year compared with the year before, to $ 296.7 million.
Nevertheless, in April 2004, Brazil exported more than $102 million worth of leather, 14% more than in April 2003. In terms of volume, April saw an increase of 22%, that is, 25 million kilos of pelts were shipped out.
Nevertheless the wet blue issue remains a worry for Cézar Müller , President of AICSul. Mr. Müller believes that by the end of the year the country will have exported 19 million pelts in the raw material stage, jeopardising the creation of jobs and wealth in the country. According to Mr. Müller, tanners could process and add value to those pelts and benefit the industry and all those involved in the process.
"Since CAMEX announced the reduction of the duty exports of wet blue hides have rocketed and exports of higher added value leather are falling", Mr. Müller observed.
