The global leather industry, including the UK, had already been faced with slowing demand when the global economy was brought to a crashing halt by the COVID-19 pandemic. The impact was far-reaching and deeply affected the UK industry. Almost overnight, orders fell away as downstream customers, cut off from their markets, stopped buying leather. Production along the length of the leather supply chain all but stopped, as tanneries and their customers were largely closed down by the virus.
The majority of UK-produced raw materials and leather is exported - nearly 90% of leather production was exported in 2018 – and the collapse of the UK supply chains are clearly illustrated by the export and import figures for the first half of 2020 below. When compared to 2019 (table 1), the value of exports of raw materials and leather fell by 39.5%, with exports of finished leather showing the largest fall, decreasing by 50.0%.
Curiously, the fall in the value of raw materials was smaller than the reported fall in prices for raw hides and skins (approximately 39% for 31-35.5 kg hides), suggesting that export volumes actually increased year on year. It is possible to speculate that tanners in export markets were looking to capitalise on reduced prices to build inventory. Imports of raw material and leather were also impacted (Table 2). Overall, the value of imports fell by 42.3%, with imports of raw materials most affected (-57.4%).
The impact of the lockdown in the UK can be clearly seen in the comparison of the first two quarters of 2020. While COVID-19 had impacted trade through the first quarter of the year, the lockdown imposed at the end of the first quarter led to significantly reductions in imports and exports. Overall, the value of exports fell by 42.1% from Q1 to Q2 with the biggest impact on finished leather exports, down 56.1%. The impact on imports was greater still, with the overall value down by 60.5% from Q1 to Q2. Imports of part-processed leather saw the largest relative fall, albeit that imports of finished leathers showed the largest gross fall in value.
Overall, the figures are a stark illustration of the impact of the global pandemic on the UK leather supply chain, with the effects being felt along the full length of the chain, from raw materials to retail, as implied by the fall in demand for finished leather.
Thus far, the UK industry has weathered these difficult times and anecdotally, there are signs of recovery. The hope is that this recovery is sustained through the rest of the year.
Table 1 – UK raw material and leather exports, H1 2019 vs H1 2020 (£)
|EXPORTS||Year to date June 2019 (£)||Year to date June 2020 (£)||Year on year
|Raw hides & skins||46,205,398||34,593,711||-25.1|
Table 2 – UK raw material and leather imports, H1 2019 vs H1 2020 (£)
|IMPORTS||Year to date June 2019 (£)||Year to date
June 2020 (£)
|Year on year
|Raw hides & skins||5,407,622||2,302,083||-57.4|
Table 3 – UK Raw material and leather exports, Q1 vs Q2, 2020 (£)
|EXPORTS||Q1 2020 (£)||Q2 2020 (£)||Quarter to quarter (%)|
|Raw hides & skins||20,197,471||14,396,240||-28.7|
Table 4 – UK raw material and leather imports, Q1 vs Q2, 2020 (£)
|Imports||Q1 2020 (£)||Q2 2020 (£)||Quarter to quarter (%)|
|Raw hides & skins||1,429,565||872,518||-39.0|