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Leather Pipeline: Respect for contracts continues to fade

The latest edition of our exclusive fortnightly market intelligence report, Leather Pipeline, brings more troubling news of hide buyers failing to respect contracts, with those in Northern China especially guilty of this.

“With a steep fall in raw material prices, respect for contracts has massively faded,” the report laments, adding that since the sharp drop in prices following the APLF exhibition in March, the number of requests for renegotiations of prices has gone up. There have also been plenty of buyers who are failing to respect agreements at all. 

The Leather Pipeline reveals that most of these cases are happening in Northern China, with the majority of sellers that do business in this region reporting problems of some kind.

“This cycle needs to be broken as the market decline is being significantly accelerated by contracts and shipments that need to be resold,” it says, explaining that suppliers are being forced to be flexible on prices in order to avoid the threat of high demurrage charges.

“Those actually playing by the rules and respecting contracts must feel like total fools when they see a neighbour who is not and is benefiting from an illegal action,” it adds.

The full report is available here.

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