Leather and meat markets are expected to restart in China

Leather and meat markets are expected to restart in China

Borders reopened and the zero Covid policy stopped in conjunction with the Chinese New Year (22 January). Observers now expect positive effects for the leather and meat markets in China from the resumption of social life. These are the first cautious considerations when reading The Sauer Report about the 2023 horizons of the local tanning industry. Upholstery companies are starting to be more active in the raw material market again. This has consolidated the prices of the most popular leathers. On the other hand, tanners operating more in the footwear business are not active at the moment: they claim that new orders are slow and that there are stocks to be disposed of.

About the leather and meat markets

The time to restock will be long, therefore, but the hope of the operators is not to pay higher prices for raw hides and leathers. The final finding of The Sauer Report is that sales volumes of hides and leathers may increase, while prices are expected to remain stable. Chinese exports on this front have increased by just over 10% in 2022 compared to 2021. But the Chinese economy as a whole only grew by 3% in 2022, largely due to the zero Covid policy.


Another dynamic to consider regarding the Chinese market is the increase in red meat imports for 2023. Purchases have been showing signs of picking up since late 2022, coinciding with the recovery of hotel and restaurant business. According to calculations by the World Agricultural Supply and Demand Estimates (WASDE), Beijing’s imports will rebound net of meat stocks still in cold storage. Global beef production in 2022 is largely unchanged from the October forecast of 59.2 million tonnes. WASDE estimates that global beef carcass prices fell in 2022, but not in the US. However, carcass prices among major exporters are still relatively high compared to before the pandemic. This suggests that supplies will be tight, and that key markets will have stable demand. WASDE predicts that the US, Uruguay and Argentina will have less supply available for export, and that Australia and Brazil will gain market share. Also in China.

Photo elaboration from Shutterstock

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