The greenback has now lost quite a bit of its value against other hide exporting regions, such as the EU or Australia which means that the comfortable period of stable, favourable currency exchange rates for non-US exporters may have come to an end. At the end of the day, this was exactly what the financial markets were looking for.

With extended sales positions for raw material around the globe and a continuing positive mood in the leather industry, raw material suppliers as such are not concerned as yet, because they don’t have to be. Anyone who has sold and covered the currency positions can now sit back and relax for some time. However, under the present conditions, we have to consider that European hides have now become quite expensive and, as long as the alternatives do not start to move, most EU hides are now starting to price themselves out of the market. And, as has been said before, US prices would have to jump to catch up.

However, this is all in the medium- to long-term, because for the next 6-8 weeks—and this means basically until the summer holidays—not too many will bother about it as there are pretty empty inventories along the supply chain. There are still a few production gaps which need to be filled and even the stocks of the heavy hides have slowly evaporated over the past few weeks. Consequently most can take it easy and any concerns may not begin to appear before mid summer when the final decisions have to be made as to how to start the production cycle for the second half of the year.

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