Hides & Skins: There are challenges everywhere
Greg Feinberg... The lower end remains under pressure.
Hides: markets remain extremely challenging. Whilst better quality hides can be moved, pricing is a concern, specifically on the low end with South American material moving at prices well below cost.
Merinos: The garment market is under severe pressure due to the situation in Russia/Ukraine (the traditional home for this material); whilst consumer tastes reduce the overall demand for sheepskin garments. Lining quality skins can be moved, but prices are so low they would barely cover costs. Many Australian skins are already trading at zero (or even abattoirs having to pay for skins to be removed).
Dorpers: Demand is fair for the better grades; difficult on the lower grades. Seasonally we’re in the midst of the lowest quality; but this should start to improve as we head towards summer.
What is domestic demand like for bovine for automotive, furniture and footwear?
For demand, you need to ask the local buyers; we won’t disclose this information. From a supply situation it’s steady, the kill is relatively stable, and we buy accordingly.
I assume you benefit from the weak Rand?
Not at all, a weak ZAR means higher input costs (chemicals, machinery, etc.), whilst raw material pricing is just adjusted to reflect the market.
I assume your business is more export-orientated than local supply and that you are therefore relatively unaffected by the weak local economy?
The local market forms an important part of our business. Export markets (China/EU) have their own issues; I certainly don’t get the impression that they’re ok in any way at all.
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