UK Leather Industry in 2017
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- Pauline Parker
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1 UK Leather Industry in 2017 The UK leather industry is comprised of specialist, high end producers of automotive, upholstery, shoe upper and sole, gloving, chamois, equestrian leather and wet blue leather saw an increase in the value of total exports of UK materials of 8.7%, with a small increase in the value of raw hides and skins exports (1.5%), a significant increase in part-processed leather exports (30.1%) and good increase in the value of finished leather exports (13.6%), compared to Overall, imports increased in value by 0.5%, with increases in the value of imports of raw hides and skins and part-processed leather, and a small fall in the value of finished leather imports (down 0.8%). This meant that the UK achieved a trade surplus, with all three primary categories achieving positive trade balances. However, in volume terms, there were reductions in exports of raw hides and skins, and finished leather, balanced to a small degree by a significant increase in exports of part-processed leather, up 24.6% versus Overall, the volume of exports grew by 0.2% compared to Import volumes of raw hides and skins also fell by 7.9%. In contrast, imports of part-processed and finished leather, notably with imported finished leather volumes exceeding exported finished leather volumes. A confounding factor in the figures is the devaluation of Sterling that occurred following the vote to leave the European Union, in 2016, which reduced the value of Sterling by 21%, increasing the apparent return on exports of UK materials. For example, for finished leather, this resulted in a 21.9% increase, year on year, in price per unit (GBP/kg).
2 When the effect of Brexit is stripped out, the figure becomes a more modest 7% increase, against a fall in export volumes of 6.8%. The effect of the devaluation of Sterling has undoubtedly reduced the impact of the difficult global trading conditions, masking in particular the impact of the fall in hide prices seen through the latter half of Overall, the data presents a cautiously optimistic picture, with increasing returns, albeit boosted by the fall in Sterling and against reduced volumes for some products, and growing volumes of imports of finished leather, suggesting a thriving leather goods manufacturing sector. UK balance of trade in Hides, Skins and wet blue, crust and finished leather in 2017 Raw hides & skins Bovine (HS4101) Ovine (HS4102) Other (HS4103) Wet blue & crust leather Bovine (HS4104) Ovine (HS4105) Other (HS4106)
3 Finished leather Bovine (HS4107) Ovine (HS4112) Other (HS4113) Chamois & Patent (HS4114) The UK industry has a market presence across the globe; UK-manufactured finished leather is sold in over 80 countries. However, the majority of trade, in raw hides and skins, wet blue and crust and finished leather, is transacted with five to ten trading partners per category and often dominated by one or two. UK Trade in Raw Hides and Skins by main countries in 2017 % OF % OF MILLION MILLION Irish Republic Italy Australia China New Zealand Irish Republic France Thailand Turkey Netherlands Main 5 sources Main 5 sources All countries All countries
4 The five largest export destinations for UK exports of raw hides and skis remained unchanged from 2016 and continued to dominate the export market, taking 89.6% of total raw exports. Notably, Italy replaced China as the largest importer, with these two nations alone, receiving 75.8% of total exports, in value terms. There was also a significant shift in the distribution of bovine exports, exports to Italy increasing from 45.1% in 2016, to 54.2% in 2017, while those to China fell by 3.2%, to 20.9%. This highlights the increasing importance of the Italian market to the UK (and others) through the past year, as the Chinese market has remained subdued. China remained the main destination for UK sheepskin, taking 76.4% of total exports. In value terms, exports fell slightly, from 47.79M to 47.66M, while volumes increased from kilo tonnes to kilo tonnes; when the devaluation of Sterling is taken into consideration, it is clear that the sheepskin market has continued to struggle through Overall, bovine exports increased by 2.36% to M, while volumes fell by 2.52%. Exports of sheepskin fell by 0.26% while volumes rose by 1.25%. Again, the devaluation of Sterling must be considered when making comparisons. Imports of raw material were dominated by bovine hides, accounting for 95.7% of the total value of imports. Furthermore, imports of hides were predominantly from the Republic of Ireland, which was responsible for 92.8% of bovine imports. The top 5 importers of sheepskin were responsible for 93% of imports, with New Zealand and Yemen exporting 63.3% and 14.5%, respectively, of the total value.
5 UK Trade in Wet Blue and Crust Leather by main countries in 2017 % OF % OF MILLION MILLION Ethiopia Italy Argentina Irish Republic Netherlands USA India Netherlands Bangladesh Czech Republic Main 5 sources Main 5 sources All countries All countries After several years of decline, exports of part-processed leathers rebounded by 30.1% and 24.6%, value and volume respectively, due largely to increased exports to Italy, of bovine and caprine materials and massive increase in exports of ovine materials to the Republic of Ireland. Exports of bovine wet blue and crust increased by 7.2% in value, although volumes fell by 8.5%. Exports of ovine wet blue and crust increased from 47,000 in 2016, to nearly 2million in 2017, increasing 4087% in value and 2444% in volume, while caprine exports increased from 2.6million to 6.1million. Overall, the five largest export destinations received 92% of exports of part-processed leather from the UK, with Italy remaining the largest destination, albeit down 5% in value terms, from Exports to the Republic of Ireland were up four-fold against China and Hong Kong fell out of the top five destinations, indicative again of the subdued Asian market in 2016, and were replaced by the Netherland and the Czech Republic.
6 Imports of part-processed leathers increased by 9.7% and 8.0% in value and volume, respectively; imports of bovine material increased by 4.0% and 6.39%, while imports of ovine material increased by 34.0% and 29.6%, in value and volume, compared with Bovine materials accounted for 62.7% of imports of part-processed materials, with two-thirds imported from Argentina, the Netherlands, Bangladesh, India and Uruguay. Imports of ovine material were dominated by Ethiopia, with 90.7% of the imported value. Eighty-three percent of caprine imports were sourced from five countries, with 51.7% supplied by Hong Kong and India. UK Trade in Finished Leather by main countries in 2017 MILLION % OF MILLION % OF ITALY U.S.A Germany Germany Argentina Hong Kong Spain Poland U.S.A China Main 5 sources Main 5 sources All countries All countries Exports of finished leather increased by 13.6% in value, against 2016, but fell by 6.8% in volume. The five largest importing countries received 63.02% of the total, with exports concentrated on the USA and Germany, which received 42.56% of exports in total. In contrast with the raw and part-processed materials, China s imports of finished leather grew in 2017, displacing the Czech Republic in the five largest destinations.
7 UK exports were dominated by bovine leather, accounting for 91.7% of total exports, up 13.78% against However exports of finished ovine leather also increased by 8.76%, while other leather (HS4113) and chamois exports increased by 31.42% and 11.13%, respectively. Imports of finished leather were down 0.8% in value but up 17.3% in volume, year on year. The five largest importers accounted for 81.4% of total imports, and were dominated by Italy with 61.3% of imports, an increase of 4.0%. As for exports, imports were dominated by bovine leather, accounting for 92.62% of the total but down 1.23% in value on The value of imports of ovine leather fell by 5.98%, and other leathers by 23.08%. In contrast, imports of chamois and patent leathers increased in value by 31.32%, compared to As previously noted, total import volumes of finished leather increased. This was largely attributable to an 18.58% increase in volumes of bovine leather; imports of chamois and patent leather also increased by 26.49%. In contrast, imported volumes of ovine leather and other leather fell by 11.98% and 33.80%, respectively.
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