Global crisis hits Brazilian leather exports
19/01/2009
The current situation of the global automobile industry and the recession in various countries as a result of the general economic downturn, have hit Brazilian leather exporters hard. Idleness in the leather industry exceeds 40% and last year's exports saw a reduction of $500 million with prices reported to be plummeting all over the country.
With 65% of leather exports geared to automotive and furniture upholstery, the sector was not able to withstand the global downturn. From large tanneries such as Bertin and Vitapelli, to the smaller companies, all been affected.
Companies are also suffering because of credit restrictions, which affect their working capital and have, therefore, contributed to the slow-down in production. The sector, which exported leather worth $2.2 billion in 2007 and was expecting to ship $2.5 billion in 2008, reached the end of the year at only $2 billion, Luiz Augusto Siqueira Bittencourt, president of the Centre for the Brazilian Leather Industry (CICB) has said.
As a result of the drop in exports, the price of raw hides has fallen 70% from March 2008 to the present date and is being sold at $ 0.30 per kilo in central Brazil, accordibng to Scot Consultoria. There are also reports of abattoirs selling hides to tanners on a ‘buy now, pay later’ basis.
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