LAMB skin prices have fallen significantly this month due to easing wool prices and global demand, Meat & Livestock Australia has reported.

MLA said the increased popularity of synthetic leathers continued to impact the sheep skin market, with many manufacturers transitioning to the cheaper alternative instead of genuine leather for shoes, clothing and car seat covers.

And the inherently changing nature of the fashion industry adds another degree of uncertainty to the sheep skin and leather industry.

In its June skin report, MLA said sheep skin prices have been under further pressure this month due to declining wool prices. With lower demand for sheep skins, a large portion of skins are fellmongered and the wool is sold separately. For the week ending 7 June, the Eastern Market Indicator (the primary wool market indicator produced by Australian Wool Innovation) was 1864c/kg, down 5 percent month on month.

MLA said this decline impacted heavily on the lamb skin market as prices declined 200-400cents per skin across most classes. The best quality lamb skins are trading at 700c/skin, while small, short or damaged lamb skins have no value in the current market, with most being discarded.

Sheep skins have held their value better than lambs, MLA said. Merino skins trading at a premium grade are still making over 2000 cents, while those in the second and third grades are generally making from 200-1300c/skin.

MLA said as very few sheep skins are processed domestically, the market relies heavily on demand from overseas markets, primarily China, Russia and Turkey. However, the dominant exporters of sheep skins are relatively limited, principally Australia and New Zealand. Despite falling demand, prices have some support, due to the limited numbers of major suppliers.

Click here to read MLA’s June skin report.