The invasion of Ukraine by Russia would normally have caused a rise in the hide market, but there are so many factors at play at the moment, it is difficult to call what will happen, writes The Sauer Report.

Firstly, the Italian tanners drove the price of hides down before Christmas, but they overplayed their hand and Chinese buyers stepped in and bought a lot of hides. Secondly, kills in Europe fell significantly due to the effect of the pandemic on abattoir workforces, while U.S. slaughters remained fairly strong.

Thirdly, there is a shortage of shipping containers coming out of China, which is causing delays in fulfilling outstanding orders, and it will be many months until this situation will be resolved, if even during 2022.

In normal circumstances, the war in Ukraine might not have been expected to have had much of an effect due to the location and the generally low volume of leather production in the country. In overall terms, the hide market is being dictated by the circumstances of the buyer, i.e. are you close to a source of hides and can you get hides shipped to your destination?

When all of these somewhat conflicting influences are taken into account, the market rose a little from mid-January until the end of February but with little enthusiasm from buyers for any further price hikes. However, the Russian invasion of Ukraine has the potential to cause the market to rise even more.