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‘Doomsday scenario’ suggests big drop in hide prices
2018/6/21 15:18:36 Source: footwearbiz Author: 点击率:

World Leather columnist David Peters has said in a new blog entry that current market dynamics suggest to him that a substantial drop in hide prices could be on the horizon, which could help make leather attractive again to a wider range of footwear manufacturers.

The US Department of Agriculture now puts the number of cattle worldwide at more than 1 billion head, with herd sizes of 305 million head in India, 232 million in Brazil, 96.8 million in China, 94.4 million in the US, 88.4 million in the European Union and 53.8 million in Argentina.

Slaughter levels are growing in countries such as the US and Brazil and many packers are enjoying high margins. This means high numbers of hides will continue to be available to tanners.

David Peters points out in his new column that in 2009, 60% of the world’s hides went into footwear but that the current figure is below 53% and could fall as low as 35% because demand for finished leather among shoe manufacturers has been falling.

“Consider the general lack of leather utilised in athletic shoes,” he says. “When this segment burst onto the market in the eighties and nineties it consumed millions of hides, estimated at around 20 million annually, however today this number would struggle to reach 1 million hides.”

He draws the conclusion, that with high levels of cattle breeding and cattle slaughter, and diminishing demand among shoe companies for leather, it will not be long before other segments that use leather could have 45 million extra hides per year available to them. This is the same volume of raw material as the global automotive leather sector is using at the moment.

“This doomsday scenario is not unrealistic and would trigger a drop in hide prices not seen for nine years,” David Peters concludes.

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