The price of lamb skins has increased to 900ȼ per skin, with more than $377 million exported from Australia last year.
Prices increased in January after staying at about 700-750ȼ per skin since June 2017, according to the latest Meat and Livestock Australia (MLA) markets report.
Of more than $377 million exported raw sheep and lamb skins last year, 92 per cent went to China.
Australian Hide, Skin and Leather Exporters Association executive officer Dennis King said the skin trade can be influenced by social and political factors.
READ: Red meat exports have hit a high of $13.7 billion, superseding last year’s figures
“The fashion industry is particularly susceptible to influence from activist groups and, in recent years, we’ve seen big global brands move away from using leather products in favour of synthetic alternatives,” he said.
“While this has had an effect on demand for hide, the market for lamb skins remains strong,” said King.
The pending elimination of a 7 per cent tariff on sheep skins by 1 January 2019 under the China–Australia Free Trade Agreement is also not expected to have a significant impact, he said.
“Australia and New Zealand are the main producers of sheep skins, so the volume of product cannot be sourced from other countries.
“In terms of quality, Australia produces a superior product, so our market should remain secure,” said King.
Simon Matters, who manages Thomas Foods International’s skin, hide and wool division, said about 60 per cent of lambs processed by the company will make the cut for the premium skin market.
“The ideal lamb skin will have at least half an inch (1.2cm) of fine, dense wool – this is crucial for the premium market, as these skins will be used for high quality garments and underlays,” he said.
“Best practice management on-farm for fine wool tends to flow through to skin value as customers pay a premium for finer microns and unmarked hides,” said Matters.
Weather discolouration to the tip and staple of wool can have a detrimental effect on skin value, as this cannot be dyed out, and shearing cuts and branding fluid also reduce skin quality.
“Australia has a reputation for producing premium skins – our skins are highly sought after and it’s important we retain this status,” said Matters.