Financial crisis clouds outlook for skin demand and prices

SANDY PARKER REPORT, VOL. 32, ISSUE 36, NOVEMBER 17, 2008
The following extract is reproduced with permission from Sandy Parker Reports, Weekly International Fur News. Sandy Parker has been covering the fur industry for more than four decades. For most of that time he has published a weekly newsletter, detailing results of international pelt auctions, wholesale price trends, business developments and movements in the trade, as well as economic and political activities that may impact on it.
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International Fur News
with Sandy Parker
Financial crisis clouds outlook for skin demand and prices
WITH THE 2008-09 AUCTION SEASON SET TO OPEN NEXT MONTH, the current international financial crisis is casting a cloud over prospects for both skin demand and prices. How the season opens usually depends heavily on early activity in the retail sector, which has yet to get into full swing. However, the financial pressures that have come to bear on all business in the major markets are already causing skin buyers to pause and keep an even more watchful eye on developments than usual. And the early signals from virtually all retail sectors indicate that consumers in general are pulling back.
In fact, shrinkage at the retail level is already evident as major organizations close stores or declare bankruptcy, while those who remain report sharp drops in earnings. So, even before the retail fur season gets under way in earnest, the storm warnings are up and furriers are girding for rough sailing ahead.
SINCE CHINA AND RUSSIA HAVE BEEN DOMINATING THE SKIN MARKETS IN RECENT YEARS, they have to be regarded as the key to how the auctions will open next month. However, despite their economies that were booming while those of the developed nations sputtered, they evidently had no immunity to the collapse that started in the U.S. and has had a domino effect around the world. Fur sales in Russia are described as off to a slower start than anticipated, prompting fewer orders being placed with Chinese and Greek manufacturers.
China’s domestic fur business, which had been growing rapidly in line with its consumers’ discretionary spending power, also is reported off to a sluggish start. But, as is the case in China’s other industries, it exports more fur products than it consumes. And, with big customers like the U.S., Russia and Western Europe cutting back, its factories may not be needing as many skins in the coming year.
IN THIS ISSUE:
Financial Crisis Clouds Outlook
Chinese, Russians also in a Bind
Auctions Seen Opening Lower
Stronger $ Working Both Ways
Early Retail Sales Called Weak
For extracts from back issues of Sandy Parker Reports see News Index. Subscribers can access an archive of complete issues at www.sandyparker.com.
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