The global trade uncertainty continues to impact the leather production because this uncertainty impacts the demand for cars, leather goods and shoes, aside from the existing changing nature of the use of leather as a fabric.
Although we notice some stability during the last months, the demand for leather is still lower than in previous years, while at the same time there is an oversupply as, obviously, the demand for meat is strong enough. The oversupply is partly due to overall consumption patterns of meat, which are stable, but also to unique events such as the African Swine Fever in Asia which have also increased the demand for beef. Some indications say that 15% to 20% of the raw hides are not used for leather and often end up as waste – which is a waste of a by-product. Overall prices are stable at a low point for the time being. Order volumes in the leather industry continue to be under pressure and Smit & Zoon notices this of course. Like everyone in the leather value chain we need to monitor the global trade uncertainty and like every company in the chain, we have to deal with the consequences.