HIDE VALUES LOWER.

New Zealand Herald, Volume LXVI, Issue 20162, 24 January 1929, Page 9

HIDE VALUES LOWER.

CAUSES OF THE POSITION.

AFTERMATH OF WAR INDUSTRY

While nearly every other item of primary production is meeting markets of remarkable strength, hides are at a comparatively low level. The situation, it was stated yesterday by an authority in tho New Zealand trade, is largely the aftermath of excessive expansion of the tanning industry during the war years, January, 1927, saw hides of certain weights and average grades selling at 6Jd pet lb. at Sydney auctions. Prices rose until in January, 1928, 14ad for the same class of hide was reached, but the market had since been continually weakening, with a particularly sharp decline in the current month, when the same grade of hides was selling at 7 7-Bd. At tho present moment American and European hide and leather markets were described as demoralised and there appeared little doubt that still lower prices would be witnessed. The present situation indicated that attempts to force leather'prices to any considerable extent resulted in <» decreased consumption of leather and shoes.

In 1928 the production of hides in Europe increased somewhat, and it was possible that before long killings in the United States would increase aiso. During the wai and for some time after the armistice, the world's tanners gradually increased their factory capacity to an enormous' extent, and although the 1920 slump compelled many tanners to scrap a big proportion of this fcxtra equipment, the leather trade was still suffering from the investment of too much capital in tannery equipment. The opinion was freely expressed overseas that the trad® would not become thoroughly stable until some of the large stock companies whiclr have been non-dividend producing for a long time go into liquidation and cease operations. In 1927, when the leather trade showed a very healthy tone, the big tanners who had been working at half capacity commenced to work at capacity in their anxiety to receive the fullest benefits from the increased leather prices. Thus a temporary worldwide shortage of hides was created and values were forced far beyond thoir true level. The resultant increased production of leather at a considerably higher cost than the trade was prepared to pay was the cause of the present difficult situation. •

< New Zealand hides wore of very good quality, although generally speaking less care .was taken in skinning here than in countries like the Argentine. It was proposed to make further efforts to prevent (lie damaging of such excellent material and thus in some degree minimise the effect of the reduced pricesf Actually the decrease in value from prices paid last January amounted to about £1 a hide.