Brazilian Hide loses competitiveness in foreign countries

Fall of 27.28 in exported quantity in the 1st 2008 trimester.
Export goal is already reviewed to be low.

The export of the first 2008 trimester surprises analysts. If, on the one hand, there is a vertiginous fall of the exported quantity of Wet Blue stage hide, on the other hand there it must be highlighted the more and more expressive participation of the high added value bovine hides in Brazilian export.
The table 1, below, registers the collective fall of Brazilian bovine hide export. It deals about an expressive fall, less than 27.28%. It is evident that the reduction on the total exported quantity was affected by the amazing fall of the Wet Blue, less than 50.1% in the period. Not less important than that was the fall of the Achieved hide export, 7.9%. A fact that draws the attention in table 1 is that Crust hide was the only kind of hide which had a positive performance. The doubt is: or the tendency of the preference for Crust is being consolidated, instead of the Wet Blue, or there is a part of Wet Blue in the export of Crust, in order to run away from the incidence of 9% of the Export Tax.
To Wolfgang Goerlich, marketing and trade promotion vice-president of the CICB, one of the most expert professionals of the segment, there is a basic reason, that is, the Brazilian raw material is more and more expensive, and so the Brazilian Wet Blue hide loses competitiveness. But he adds, it is not only raw material which is more expensive, all the costs are getting more and more prohibitive. The workmanship is expensive, the salaries, the energy, the chemical products… When these costs are converted into dollar, our competitiveness has a significant fall. The Wet Blue market loss is happening specially regarding to the United States. The Crust hide has still a higher competition power, in spite of the same influences. Even so, it is possible to have a Crust with the same value, Argentine, but with a better classification.
Goerlich is realist. To him, the hide exported quantity will fall more and more, because the horizon of weakened dollar, the fall of the ox supply, of the meat, of the cattle seems that will remain for a good period, and in such conditions, Brazil will keep losing market. To him, the sale of American hide to Asia is growing, specially Salted hide (around 75% of the total) and Wet Blue.

 

Tabela 1 - Exportação de Couros Por Nº de Couros Janeiro a Março - 2008 x 2007 Table 1 - Leather Exporation / By Nº of Hides January to March  – 2008 x 2007
Tipo de Couro Kind of leather	Jan/Mar 2008	Jan/Mar 2007	2008/2007 (%)
Salgado / Salted	5.537	20.218	-72,61%
Wet-Blue	2.415.633	4.840.834	-50,10%
Crust	1.381.668	1.231.018	12,24%
Acabado / Finished	2.982.335	3.237.984	-7,90%
Subtotal	6.785.173	9.330.054	-27,28%
Solas / Soles	123.366	114.512	7,73%
Ovinos / Sheep	146.952	115.489	27,24%
Caprinos / Goats	18.137	22.060	-17,78%
Total Geral	7.073.628	9.582.115	-26,18%

Fonte / Source: SECEX – Organização / Organization: COUROBUSINESS

 

In value, the result of the first trimester shows an export fall in four main sorts of bovine hide of about 4.9%. The hide sale of all the chap. 41 of NCM bovine reached US$ 532.6 billions. According to Goerlich, 2007 export will hardly be repeated in 2008. He believes that, in value, the export remains in about US$ 2 billions (in 2007 it was US$2.2 billions). In the beginning of this year the expectation was that export reached around US$ 2.5 billion.
To Emilio Bittar, from Coming, the Brazilian hide export fall in the first trimester is associated to the fall in the raw material supply because of the slaughter fall. In addition to all the causes that are known – unfavorable exchange etc... – and I spite of that, the Federal Government stands upon keeping the taxation of 9% on Wet Blue sales. To him, the persistency of this taxation is inconceivable in a trade balance deterioration setting.
Emilio Bittar, in another thought line, believes that the verified fall will be stabilized, and it is worthwhile to try every effort to reach the aim of the fixed export in the begging of this year.
 

Tabela 2 - Exportação de Couros/ Por Valor - US$ 1,00 Janeiro a Março– 2008 x 2007 Table 2 - Leather Exportation/ By Value – US$ 1.00 January to March  – 2008 x 2007
Tipo de Couro Kind of leather	Jan/Mar 2008	Jan/Mar 2007	2008/2007 (%)
Salgado / Salted	50.841	267.553	-81,00%
Wet-Blue	124.432.164	204.454.366	-39,14%
Crust	105.833.093	87.948.806	20,33%
Acabado / Finished	291.298.365	255.770.891	13,89%
Total	521.614.463	548.441.616	-4,9%

Fonte / Source: SECEX – Organização / Organization: COUROBUSINESS

 

The table shows the performance of the exported mean value. The Achieved hide is the one that was more valorized in this period – 23.65% with regard to the same period of 2007 – reaching the mean of US$ 97.67 per unity. According to the consulted experts, the Wet Blue value – US$ 51.51 is in an adequate platform, however it cannot be applied to Crust hide, US$ 80,51.

For some people, 2007 values, which are parameter of the current comparison, do not reflect the market reality on that moment, because they are generated by former export contracts.

 

Tabela 3 - Exportação de Couros / Valor médio exportado Janeiro a Março - 2008 x 2007 Table 3 - Leather Exportation / Average exporting value January to March  – 2008 x 2007
Tipo de Couro Kind of leather	Jan/Mar 2008	Jan/Mar 2007	2008/2007 (%)
Salgado / Salted	9,18	13,23	-30,61%
Wet-Blue	51,51	42,24	21,96%
Crust	80,51	71,44	12,69%
Acabado / Finished	97,67	78,99	23,65%
Subtotal	77,67	58,78	32,13%
Solas / Soles	43,78	39,07	12,06%
Ovinos / Sheep	15,66	17,72	-11,60%
Caprinos / Goats	37,10	6,64	458,39%
Total Geral	75,69	57,93	30,65%

Fonte / Source: SECEX – Organização / Organization: COUROBUSINESS

 

The most relevant datum for those who follow hide export and the discussions generated by such export, in the last 20 years, is the evidence in the table 3 that the Achieved hide represented, in this period, 43.95% of the total exported. And more, if it is added to the Crust hide participation, the export of higher added value hides in Brazilian export reached 64.91%. Even if accepted that any Wet Blue export has been counted as if it was Crust, the predominance, as always wanted, belong to higher added value hides.

 

Tabela 4 - Participação % na quantidade exportada Janeiro a Março (2008 e 2007) Table 4 - % participation in quantity exported January to March  (2008 and 2007)
Tipo de couro Kind of leather	Jan/Mar 2008	Jan/Mar 2007
Salgado / Salted	0,08%	0,22%
Wet Blue	35,60%	51,88%
Crust	20,36%	13,19%
Acabado / Finished	43,95%	34,70%
Total	100,00%	100,00%

Fonte / Source: SECEX – Organização / Organization: COUROBUSINESS

 

Tables 5 to 12, as follows, show a good vision of Brazilian hide export whole in the first 2008 trimester.
The table 6 can be highlighted. It shows the fall reflected in the main purchaser markets. Italy: less 9% in value and less 26% in quantity. China, less 15% in value and less 23% in quantity. Hong Kong, less 25% in value and less 49% in quantity. Italy, destiny of 30% of the quantity of exported hide and China, destiny of 35%, represent in the first three months of 2008, practically, two thirds of the destiny of Brazilian hide, stimulating concentration.

 

Tabela 5 - EXPORTAÇÃO BRASILEIRA DE COUROS E PELES (CAP. 41) – Jan/Mar de 2008/07 Table 5 - BRAZILIAN EXPORTS OF HIDES AND SKINS (CHAP 41) – Jan/Mar 2008/07
SIT. MONETÁRIOS (US$) VALUE (US$)			CRESC. (%) GROWTH (%)			SIT. FÍSICA (Kg) QUANTITY (KG)		CRESC. (%) GROWTH (%)
MÊS MONTH	ANO 2008	ANO 2007	VAR08	MÊS	ACUM.	ANO 2008	ANO 2007	VAR08	MÊS MONTH	ACUM.
Jan	183.489.682	176.601.526	-4%	4%	4%	30.342.136	35.168.257	-1%	-14%	-14%
Fev Feb	176.804.322	173.816.556	-4%	2%	3%	25.959.935	36.108.598	-14%	-28%	-21%
Mar	172.353.551	202.027.031	-3%	-15%	-4%	25.810.531	40.461.803	-1%	-36%	-27%
Total	532.647.555	552.445.113				82.112.602	111.738.658

Fonte / Source: SECEX – Organização / Organization: AICsul

 

 

Tabela 6 - DESTINO DAS EXPORTAÇÕES DE COUROS E PELES POR PAÍSES(CAP.41) 2008/07   -   BRASIL Table 6 - DESTINATION OF HIDES AND SKINS EXPORTS BY COUNTRIES (CHAP 41)
PAÍSES COUNTRIES	SIT.MONET. (US$) VALUE		PERCENTUAL PERCENTAGE		SIT.FÍSICA (Kg) QUANTITY		PERCENTUAL PERCENTAGE
	Jan/Mar 08	Jan/Mar 07	PART08	CR.07/08 GROWTH	Jan/Mar 08	Jan/Mar 07	PART08	CR.07/08 GROWTH
Itália/ Italy	158.745.604	174.035.018	29,80%	-9%	24.624.820	33.394.648	29,99%	-26%
China	101.959.070	119.885.734	19,14%	-15%	28.785.930	37.463.130	35,06%	-23%
Estados Unidos/ USA	59.287.393	54.312.294	11,13%	9%	3.182.002	3.549.564	3,88%	-10%
Hong Kong	44.008.367	58.660.808	8,26%	-25%	7.412.656	14.664.235	9,03%	-49%
Vietnã/ Vietnam	27.573.541	13.122.250	5,18%	110%	3.892.769	2.988.031	4,74%	30%
Indonésia	11.988.402	15.907.144	2,25%	-25%	848.372	1.103.907	1,03%	-23%
Alemanha/ Germany	10.522.478	7.610.310	1,98%	38%	942.291	859.007	1,15%	10%
Japão/ Japan	10.306.658	6.480.693	1,93%	59%	1.032.195	949.697	1,26%	9%
Noruega	8.853.176	3.672.177	1,66%	141%	331.804	155.024	0,40%	114%
México	8.303.173	7.311.851	1,56%	14%	819.421	1.169.989	1,00%	-30%
SUBTOTAL	441.547.862	460.998.279			71.872.260	96.297.232
Demais Países Other countries	91.099.693	91.446.834			10.240.342	15.441.426
TOTAL	532.647.555	552.445.113			82.112.602	111.738.658

Fonte / Source: SECEX – Organização / Organization: AICsul

 

 

 

 

 

Tabela 7 - EXPORTAÇÕES BRASILEIRAS DE COUROS POR CLASSIFICAÇÃO DAS NCMs Jan/Mar 2008 Table 7 - BRAZILIAN LEATHER EXPORTATION BY NCM CLASSIFICATION January to March 2008
CLASSIFICAÇÃO CLASSIFICATION	PESO LIQ.  (KG) WEIGHT	PART (%)	US$ FOB	PART (%)	Nº DE COUROS Nº OF HIDES	PREÇO MÉDIO AVERAGE PRICE
						P/ COURO BY LEATHER	P/ KG BY KILO
1. Couros Bovinos Salgado Leve (med. 8Kg) Light Salty Bovine Hides (med.8Kg)	12.450	0,02%	27.850	0,01%	1.556	17,90	2,24
2. Couros Bovinos Salgado Pesado (med. 25Kg) Heavy Salty Bovine Hides (med.25Kg)	99.516	0,12%	22.991	0,00%	3.981	5,78	0,23
3. Couros Bovinos Wet Blue Pequenos (med.7Kg) Small Wet Blue Bovine Hides (med. 7Kg)	2.033.795	2,48%	6.820.055	1,28%	290.542	23,47	3,35
4. Couros Bovinos Wet Blue (med. 15Kg) Wet Blue Bovine Hides (med. 15Kg)	31.876.366	38,82%	105.978.447	19,90%	2.125.091	49,87	3,32
5. Raspa Wet Blue / Wet Blue Scraping	19.659.907	23,94%	11.633.662	2,18%	-	-	0,59
6. Couros Bovinos Sola (med. 7Kg) Sole Bovine Hides (med. 7Kg)	863.559	1,05%	5.401.517	1,01%	123.366	43,78	6,25
7. Couros Bovinos Semi-Acabado (med. 5,5Kg) Semi-Trimmed Bovine Hides (med. 5,5Kg)	6.920.665	8,43%	105.833.093	19,87%	1.258.303	84,11	15,29
8. Couros Bovinos Acabados (med. 5,5 Kg) Trimmed Bovine Hides (med. 5,5Kg)	16.402.844	19,98%	291.298.365	54,69%	2.982.335	97,67	17,76
Sub-Total - Couros Bovinos Subtotal - Bovine Hides	77.869.102	94,83%	527.015.980	98,94%	6.785.174	77,67	6,77
Demais Couros / Other Hides
Peles de Eqüídeos / Equidae Hides	0.000	0,00%	0.000	0,00%
Peles de Ovinos / Ovine Hides	146.952	0,18%	2.301.568	0,43%
Peles de Caprinos / Caprine Hides	18.137	0,02%	672.818	0,13%
Peles de Suínos / Swine Hides	5.073	0,01%	75.369	0,01%
Peles de Répteis / Reptile Hides	0.115	0,00%	27.431	0,01%
Peles de outros animais / Other animals hides	1.233	0,00%	30.109	0,01%
Aparas e couro reconstituído Chippings and reconstructed leather	4.071.990	4,96%	2.524.280	0,47%
Sub-Total - Demais Couros Subtotal - Other Hides	4.243.500	5,17%	5.631.575	1,06%
TOTAL DO CAP. 41 - COUROS	82.112.602	100,00%	532.647.555	100,00%

Fonte / Source: SECEX – Organização / Organization: AICsul

 

 

 

Tabela 8 - EXPORTAÇÃO BRASILEIRA DE COUROS BOVINOS SALGADOS Table 8 - BRAZILIAN EXPORTATION OF SALTED BOVINE LEATHER
	FÍSICOS (Nº COUROS) QUANTITY (Nº OF HIDES)		CRESC. (%) GROWTH(%)			MONETÁRIOS (US$) VALUE (US$)		CRESC. (%) GROWTH
MÊS MONTH	ANO 2008	ANO 2007	VAR08	MÊS MONTH	ACUM. ACCUM.	ANO 2008	ANO 2007	VAR08	MÊS MONTH	ACUM. ACCUM
Jan	1.130	1.788	-79%	-37%	-37%	8.960	28.740	-81%	-69%	-69%
Fev Feb	4.407	7.855	290%	-44%	-67%	41.881	133.367	367%	-69%	-69%
Mar	0.000	10.575	-100%	-100%	-91%	0.000	105.446	-100%	-100%	-81%
Total	5.537	20.218				50.841	267.553

Fonte / Source: SECEX – Organização / Organization: AICsul

 

Tabela 9 - EXPORTAÇÃO BRASILEIRA DE COUROS BOVINOS WET BLUE Table 9 - BRAZILIAN EXPORTATION OF WET BLUE BOVINE HIDES
	FÍSICOS (Nº COUROS) QUANTITY (Nº OF HIDES)		CRESC. (%) GROWTH			MONETÁRIOS (US$) VALUE (US$)		CRESC. (%) GROWTH (%)
MÊS MONTH	ANO 2008	ANO 2007	VAR08	MÊS MONTH	ACUM. ACCUM.	ANO 2008	ANO 2007	VAR08	MÊS MONTH	ACUM. ACCUM
Jan	939.134	1.614.415	-4%	-42%	-42%	47.911.237	65.437.451	-1%	-27%	-27%
Fev Feb	742.670	1.614.858	-21%	-54%	-48%	38.914.940	67.603.124	-19%	-42%	-35%
Mar	733.829	1.611.560	-1%	-54%	-50%	37.605.987	71.413.791	-3%	-47%	-39%
Total	2.415.633	4.840.833				124.432.164	204.454.366

Fonte / Source: SECEX – Organização / Organization: AICsul

 

Tabela 10 - EXPORTAÇÃO BRASILEIRA DE COUROS BOVINOS CRUST+VEGETAIS Table 10 - BRAZILIAN EXPORTATION OF CRUST AND VEGETABLE
	FÍSICOS (Nº COUROS) QUANTITY (Nº OF HIDES)		CRESC. (%) GROWTH (%)			MONETÁRIOS (US$) VALUE (US$)		CRESC. (%) GROWTH (%)
MÊS MONTH	ANO 2008	ANO 2007	VAR08	MÊS MONTH	ACUM. ACCUM.	ANO 2008	ANO 2007	VAR08	MÊS MONTH	ACUM. ACCUM
Jan	493.861	373.632	5%	32%	32%	39.474.898	26.293.268	4%	50%	50%
Fev Feb	456.310	378.913	-8%	20%	26%	36.934.054	27.374.763	-6%	35%	42%
Mar	431.498	478.474	-5%	-10%	12%	34.825.658	34.280.775	-6%	2%	26%
Total	1.381.669	1.231.019				111.234.610	87.948.806

Fonte / Source: SECEX – Organização / Organization: AICsul

 

 

 

Tabela 11 - EXPORTAÇÃO BRASILEIRA DE COUROS BOVINOS ACABADOS Table 11 - BRAZILIAN EXPORTATION OF FINISHED BOVINE LEATHER
	FÍSICOS (Nº COUROS) QUANTITY (Nº HIDES)		CRESC. (%) GROWTH (%)			MONETÁRIOS (US$) VALUE (US $)		CRESC. (%) GROWTH (%)
MÊS MONTH	ANO 2008	ANO 2007	VAR08	MÊS MONTH	ACUM. ACCUM.	ANO 2008	ANO 2007	VAR08	MÊS MONTH	ACUM. ACCUM
Jan	950.813	1.046.272	-13%	-9%	-9%	94.273.888	83.793.623	-7%	13%	13%
Fev Feb	1.030.942	991.962	8%	4%	-3%	98.538.336	77.218.368	5%	28%	20%
Mar	1.000.580	1.199.750	-3%	-17%	-8%	98.486.141	94.758.900	0%	4%	14%
Total	2.982.335	3.237.984				291.298.365	255.770.891

Fonte / Source: SECEX – Organização / Organization: AICsul

 

 

Tabela 12 - Exportação pela NCM 42050000 (Obras de couro) Janeiro a Março 2008 e 2007 Valores em US$ 1,00 Table 12 - Exportation by NCM 42050000(Leathergoods) January to March  2008 and 2007 Values in US$ 1,00
MÊS MONTH	EM VALOR (US$) IN VALUE		CRESC. (%) GROWTH			QUANTIDADE (KG) QUANTITY		CRESC. (%) GROWTH
	ANO 2008	ANO 2007	VAR08	MÊS MONTH	ACUM ACCUM	ANO 2008	ANO 2007	VAR08	MÊS MONTH	ACUM.
Jan	5.843.134	6.599.168	-17%	-11%	-11%	1.343.864	1.738.832	-12%	-23%	-23%
Fev Feb	5.525.540	7.225.545	-5%	-24%	-18%	1.353.167	1.893.890	1%	-29%	-26%
Mar	5.805.630	7.118.076	5%	-18%	-18%	1.371.623	1.898.439	1%	-28%	-26%
Total	17.174.304	20.942.789				4.068.654	5.531.161

Fonte / Source: SECEX – Organização / Organization: AICsul