This is from the internet so take it for what it's worth but,,,,
http://www.trapperman.com/forum/ubbthreads.php/topics/4260090/1
Most trappers are aware that recent complex developments in the fur market will affect prices, and there has been a lot of speculation and rumor. Mike Wilhite wrote a lengthy, detailed, very factual analysis in his Fur Market Report for the upcoming March/April issue, and I felt some of the information was of immediate concern. Here is a brief summary of the essential facts, in Wilhite’s words:
Last year things lined up perfectly, and nobody saw record prices coming in February. This past fall, nobody also foresaw arrests for corruption at key Chinese fur processing plants, or the unusually mild winter in most of Europe, Russia, China, Korea, and Japan.
Cold weather sells fur products. Last year, when fur sales peaked, China experienced their coldest winter in 28 years, and the weather in Russia and Europe was brutal. In contrast, during the current retail season these same areas saw record warmth. This made it extremely difficult for retailers to move fur products, and their retail sales were off by more than 50%. When manufacturers can’t move stock, they have much less room for this year’s fur harvest.
China elected a new premier in the spring of 2013, Li Keqiang, who has pledged to reform capital markets and the currency, increase environmental controls to cut pollution, and fight China's pervasive corruption.
The Ministry of Environmental Protection issued new waste discharge standards for leather and fur processing, setting specific limits on certain materials. These took effect on January 1, 2014. The government promised to shut down tanneries that failed to comply by the end of 2014, and it’s uncertain how many will be able to do it.
As part of Li’s anti-crime campaign, Chinese customs authorities put 260 smuggling cases on file for investigation in a nationwide crackdown. The campaign mainly targeted drugs, weapons, endangered species, and rare earth metals. However, during the course of their investigations, customs officials in the port city of Shantou were tipped off that the Kuikeng Fur Co. had been smuggling fur. Kuikeng Fur is one of the largest fur and leather apparel manufacturers in China. Police mobilized to bust the smuggling ring, whose branches spread to three other cities, including the capital city of Beijing, and in the raid 26 people were arrested and over 1 million pieces of fur were seized. Also seized were documents and electronic data.
So far at least $1.25 billion worth of fur has been seized in China. Most of this has been ranch mink and fox coming from all over the globe, including North America. Some of the key players have already been handed 10-year prison terms, and at the time of this writing as many as 100 other fur buyers, brokers, dressers, and processors in China are under house arrest, awaiting sentencing. It’s believed that some Chinese buyers will sit out this season, from fear of being investigated.
This, along with the lethargic retail season, has already slowed advancement of fresh goods, which was evident at the beginning of the sales season at auctions in Copenhagen and Helsinki, where prices dropped as much as 25%, with very poor clearances. Market experts see a lack of Chinese support causing some skin prices to fall at least 30% from their peaks. However, items of interest to the European fashion trade (marten, fisher, red and gray fox, some heavy coon) will likely sell well.
To recap:
• The new Chinese premier is getting tough on crime, which has resulted in arrests of key fur buyers, brokers, and dressers.
• New Chinese pollution standards are affecting tanneries, which must comply or face being shut down.
• Abnormally warm winter in most of Asia, Europe, Korea, and Russia resulted in more than a 50% decrease in retail sales.
• Consumers are increasingly resisting high retail prices for finished fur goods.
Before I’m accused of spreading gloom and doom, there is a positive side to things. I believe this is not a long term problem. I believe China will eventually work things out, and when retail sales pick up they will resolve their problems quicker. When normal weather returns to prime markets, so will retail buying. We may be traveling down a rocky road for a while, but I believe it will be a short ride. However, we are in for a season or two of adjustments.
Also, there has been a lot of talk about the Chinese raising tariffs on imports, hence slowing sales and encouraging illegal activity. This is all unsubstantiated talk. According to the new tariff program, which took effect January 1, 2014, the MFN rates that include imported mink and fox skins were actually cut 5%. This is the first change in fur skin import taxes in 8 years, and it’s a positive one.
Everyone agrees that NAFA’s February sale and Fur Harvester’s March sale will tell us more. The Beijing Fur & Leather Products Fair was very well attended and considered a success; however, exhibitors’ attempts to do business based on prices paid at the December auctions reportedly were not successful, as buyers apparently are waiting for the major auctions for a better indication of price direction.
All the major players in the industry acknowledge that the fur market will experience a price adjustment in upcoming auction sales. But let’s not overreact. This is a period of adjustment; it is not a market crash. – Mike Wilhite