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Leather pipeline: Brighter prospects for the industry in 2019?

The current situation in the leather industry is very different to the previous crises it has gone through, but there is the possibility of “fundamental change” in 2019, according to the latest edition of our exclusive Leather Pipeline market intelligence report.

“Even the most experienced pundits cannot remember a time when the industry had to deal with so many problems at the same time. We have had problems and we have had the crisis, but those issues were local or regional and there was always a clear light at the end of the tunnel,” the report says. 

The big difference this time is that the main problem is not a fall in general consumption. This time, there is no issue of insufficient demand for finished products; instead, the problem is directly related to the use of leather as a material. The harsh reality is that leather production is shrinking due to falling demand, which has caused a build-up of material stocks across the world. 

It is not all bad news, however, with the report saying the situation cannot last forever. With hides only able to be stored for a finite amount of time, they will eventually need to be sold off at lower prices or disposed of. This will return the raw material market to balance. “This will either happen due to the increased waste of raw material or due to an increase in demand,” the report explains.

It warns that the situation might have to get worse before it can get better, especially for those at the beginning of the supply chain but says that “markets always return to balance eventually”. It will not happen at the same time or to the same extent for all sectors and origins, but “trying to force it is not a good idea”, the report adds. 

In the meantime, all that those within the industry can do during the summer break is to closely watch the changes in general conditions so that they are prepared for the re-start of the production season in September, the report concludes. 

The full Leather Pipeline market intelligence report can be accessed here.




Schill & Seilacher D

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