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Leather Pipeline calls for industry to see that times have changed

The latest Leather Pipeline market intelligence report, published in our Leatherbiz Weekly newsletter today, contains a hard-hitting call for people in the leather industry to acknowledge that recent changes in the correlation between hide supply, tanning and demand for finished leather represent something more than the familiar fluctuations of meat and leather industry cycles.

In the report, which subscribers can read in the Market Info section of the website, the authors make it clear that business was cyclical in the past owing to economic reasons. If prices went too high, demand went down; if prices were attractive, demand went up. With better economic conditions, demand went up; with economies in crisis, demand went down. “This was in keeping with the logic of supply and demand, the normal and natural driver of the markets,” the Leather Pipeline report says.

However, it goes on to say that the changes the leather industry is witnessing at the moment is less in keeping with that logic. It says that, in times past, a decline in leather use and consumption, for example in garments or luggage, was “easily compensated” for by expanding consumer demand in the emerging markets and rising consumption in the automotive industry. But it claims that situation reached its peak in 2015.

Now, the report continues: “We have to accept that conditions have changed. The simple truth of the need for growth among brands and manufacturers led the chemical industry and consumer product manufacturers to consider using alternative materials. All this was supported by automated manufacturing, shorter lifecycles and by a change in the structures in retail and the globalising consumer markets where one product fits all.”

Its conclusion is that leather will never disappear, but it might no longer be needed in sufficient volumes to use up all the raw material that is produced.

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