livestock

A Magazine for Livestock and Meat Advisory Council & its allied associations
G
rowing
GROWING STOCKPILES OF HIDES
stockpiles of
hides at
Zimbabwe's - Rethinking the export of hides and skins
abattoirs highlight the
deepening crisis in the
hide-to-leather value chain.
This has been precipitated
by concurrent crashes in the
local and international hide
market and the introduction
of an export surtax to
protect home industry that
translates into almost 90%
of the current international
market price, making it
sub-economic to export
hides.
In the current economic
slump, the local tanning
industry is not able to take
up its quota of hides for
value addition under the Shutterstock
Zimbabwe Leather Sector
Strategy (2012 –2017). Far also calling for an increase
Hides outside a shoe store
it is sub-economic for continue to decline, with
from stepping up beneficia- in the export quota from abattoirs to export hides reduced demand for hides
tion to the targeted 75% of 25% to 40% with no from Zimbabwe. and a decrease in local
raw hides and skins, local restrictions on exports when Global market prices for market prices. It is feared
tanneries are only able to the local market is unable both raw and wet blue that mounting stocks of
absorb a small percentage to take up its quota. Some hides have plummeted to hides at abattoirs will lead
of flared hides and are 60% of Zimbabwe's raw their lowest level for several to further hide spoilage.
offering prices ranging hides meet quality years. The crash in the local Money realised from
from 12% to 50% of specifications for the market prices is even more hides could be ploughed
international market prices, international wet blue hide drastic, with prices falling back into a Leather
which have also plummeted
Development Plan
in the international hide The competitiveness of the tanning industry to build the capacity of
market crash.
must be strengthened, so it can play its role in tanneries to operate viably,
“The Abbatoirs
strengthening the whole
Association of Zimbabwe value addition, outlined in the Zimbabwe leather value chain
(AAZ) fully supports local
Leather Sector Strategy
AAZ is also proposing to
value addition and
establish a Leather Industry
recognises that the local market. by as much as 50% in Fund from a fair hide levy
tanning industry must have In October an export 2015. that will be ploughed back
first priority on hides,” surtax of 15% or $0.75/kg The competitiveness of into developing the leather
emphasises AAZ chairman, — whichever is the tanning industry must industry to strengthen
Godrey Chanetsa. greater—was imposed on be strengthened, so it can tannery competitiveness. It
“Beneficiation is important the export of raw hides play its role in value would be modelled on the
to grow the Zimbabwean under the 2015 Mid Term addition, outlined in the Dairy Revitalization Fund to
economy. Fiscal Policy Review Zimbabwe Leather Sector grow the home dairy
“But where good quality Statement. At the same Strategy industry, which is funded
hides are going to waste time, export tax on hides “In the whole equation, from the 10 cents a litre
because the local market is was extended to the 25% there is a need to restore levy on all UHT milk
not able to use its quota, export quota not reserved competitiveness in the local imported into Zimbabwe.
we feel there should be for local tanners in the tanning industry,” explains Revenue generated from
flexibility to allow us to Zimbabwe Leather Sector Chanetsa. “Local tanners tax on raw hide exports is
move these stockpiles of Strategy (2012–2017). must be competitive; not not being channelled into
hides and sell them on the In the global hide market under-price hides in order building the leather
international market,” says slump, this effectively to survive at the expense of industry.
Chanetsa. means that there is a tax on abattoirs and farmers who AAZ members account
AAZ proposes reducing all hide exports, which produce the raw materials for some 70% of formal
the export tax to a equates to 88% of the for this industry.” sector cattle slaughters and
reasonable percentage of international market prices. High processing costs are the largest producers of
the export parity price. It is At $0.05—0.10 cents a kg, have seen tannery profits hides in Zimbabwe.
14
Livestock Today April-June 2016