WOOL prices have provided some support to the falling Australian sheep skin market, but declining lamb and sheep slaughter figures have done little to counteract lower export demand.
MLA said the Australian sheep skin market has recorded a significant decline since April, mainly due to plant closures in China because of environmental issues and environmental policy changes, and a reduction in international leather goods demand.
MLA said a 13 percent drop in the July lamb kill and a 43pc lower sheep slaughter have done little to counteract the lower export skin demand.
MLA said during August lamb skins (20-24kg, 2”-3” and free of vegetable matter) averaged $4.75/skin, down 38pc month-on-month and 46pc below year-ago levels
Merino sheep skins (20-24kg, 2”-2.5”, free of vegetable matter) averaged $17/skin, 8pc lower from July, but steady year-on-year.
MLA said the strengthening wool indicator has provided some support to the skin market, with Merino, and also longer stapled skins, increase their premium over crossbred or shorter staple counterparts.
During August, Merino skins were at a 300pc premium to crossbred skins (20-24kg, free of vegetable matter, 2.5”-3”), up from the 263pc premium in July and well above the 227pc recorded in August last year.
Similarly, lamb skins (20-24kg, free of vegetable matter) carrying a greater than 3” staple were at a 186pc premium during August to their 0.5”-1” counterparts, up from the 108pc premium in July and the 89pc premium during the corresponding period last year, MLA said.
Despite year-to-June Australian skin exports declining 6pc year-on-year, shipments to China have remained steady and represent the vast majority — 95pc so far in 2016 — of all skin exports. However, the export unit price of Australian skins to China fell 15pc month-on-month in June, to $12.29/skin, with subsequent similar magnitude falls recorded on the domestic skins market.
All Australian skins indicators quoted above are reported by MLA in the weekly skins report. The recently released MLA co-product report also provides the latest prices and trends on other livestock co-products.
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