Therefore, China has become the biggest consumer of fox skins. Leather jackets with fox trim (almost exclusively dyed blue fox) have been the height of fashion for many years. Men wear fur trim on leather jackets, but mostly prefer black mink skins. The consumption of mink skins is estimated to increase this season, whereas the high price for blue fox seems to decrease demand for this item.
Greece
In Greece, the number of retail stores is huge. Kastoria has an estimated minimum of 1,500 retail stores. Siatista, its neighboring tow, has about 750, and Athens, Thessaloniki and Katherini have an estimated 900 stores together. All of these retailers have made competition sharp, and customers -- mainly Russian, price-conscious tourists -- compare prices with no respect to quality and design. The seller's proceeds are therefore pressed home.
There is still a rapid sale going on, maybe because fur garments are still sold at the "old prices" because Greeks are very uncertain if the Russian tourists are willing to pay higher prices.
Stocks of both fur skins and garments are low.
Italy
The devaluation of the Italian lira in 1992 soon made Italian fur garments competitive in the export markets. Italian exports are growing, and this has influenced economic growth positively. An unemployment rate of about 12%, however, seems stuck and has begun to hit northern Italians. In general, fear of unemployment and an unstable domestic political situation have urged Italian consumers to be more price-conscious and less interested in fashion and branded goods than they have been in the past.
Italians love fur garments, and of course, rich Italian women can still afford to buy fur coats. However, this woman has no wish to attract attention to herself and thereby risk having her accounts examined by the Italian tax authorities. Therefore, if she chooses to buy a fur coat, she often prefers a mink that doesn't look real (dyed or sheared), or one that's reversible to suede or leather.
The domestic sale of mink coats -- which has accounted for most of fur sales in the past -- is declining, and part of the Italian trade's sale to the domestic market includes other items such as fur trims or lambskin jackets.
In Italy, stocks are low: stocks of garments are about 10% less than at this time last year; stocks of skins are down about 20%.
South Korea
South Korea is developing from a country of middle incomes to a well-developed industrialized country. Financial development is positive, and growth of more than 7% is expected this year and next year. The growth rates have been among the highest in the world, comparing them for a long period. Today South Korea is the second largest economy in Asia, led by Japan.
Private consumption is growing strongly, and everything indicates this trend will continue. Prestigious consumer goods especially are in demand, and the Korean consumer is very brand-conscious. Fur garments are also in demand. Korea has a continental climate and cold winters, so fur garments form an integral part of female consumers' wardrobes.
Coats of scanblack, mahogany and blue type minks are still demanded. Scanbrown and scanglow types are gaining a footing, especially if designed and made by Italians. Mink trimmings are also sold, but sales of fox-trimmed garments are stagnant or declining, apparently due to high prices.
In general, stocks of fur skins are at the same level as last year at this time, but there are a few more finished goods.
Japan
The JPY rate has increased about 30% against the USD since the beginning of 1995. This has resulted in a decline in Japanese exports to the US, Japan's most important export market, which takes about one third of the Japanese export.
Among Japanese consumers, uncertainty has been created by an historically high level of unemployment. This has made private consumption almost stagnate. A decline in value of real property has also contributed to a lack of consumer confidence. Last January's earthquake in Kobe and terrorist attacks this past year with nerve gas on civilians has not at all improved the situation.
In spite of these negative factors, fur garments are still sold in Japan. Traditional fur coats only account for a small part of turnover, whereas sheared mink in strong colors and fur-trimmed cashmeres and other types of outerwear lined with fur are in demand.
The fur garment manufacturing sector in Japan is limited; most garments are (Copenhagen Report, continued from previous page)
imported from Hong Kong/China. Stocks of fur garments are low, and there are no stocks of skins.
Spain
The Spanish consumer market must contend with unemployment, inflation and budget deficit. Unemployment is the highest in Europe, estimated at 2% in 1994. Young people -- under age 25 -- are especially hit, at a rate of 36%. In order to strengthen exports, Spain has devalued its currency four times since 1992. The last time was last March, when the peseta was devalued 7%. The consequence, seen from the fur trade's point of view, is that fur skin and garment prices have increased correspondingly, which has resulted in sales declines.
In spite of this, the fur trade is doing its best with advertisements, shows and more, to ensure that fur will continue to be on consumers' wish lists. Perhaps it is not number one, but it's still in the top 10. Black or brown furs are in demand; other colors are not. Trimming with fox and lamb is becoming more and more popular among Spanish consumers.
Stocks of skins are very low, not because sales have been strong during the last months, but rather because purchases have been very limited during the season.
Germany
After several years of recession, Germany is now recovering. Economics are in doubt, however, whether Germany will keep its market share in exports. Doubt has arisen not only because the DEM is very strong, but also because wage bargaining has resulted in very high wage increases of about 5% in 1995 and a further 5% in 1996. This will have a negative influence on Germany's competitiveness.
Growth in private consumption is expected to reach 3% in 1996, in spite of a 7.5% increase in personal income taxes. Unemployment is decreasing in Germany.
The German media now have a more varied look at the fur trade than in the past, when they were very critical and negative.
During the season, in Germany fur has mainly been used as trimming, whereas fur coat sales have not been very good.
Stocks in Germany also are low; due to a declining turnover in previous years, buyers are very cautious.
Conclusion
It appears we are approaching a good sales season. Stocks of fur skins will be very limited when the new season starts in December. Only the usual volume of finished goods will be available at the manufacturing/wholesale level. But we must remember the following important facts:
The fur trades in Europe and the US continuously lose ground. This is a negative sign, despite strong emerging markets. Consumers in these new markets (China, Korea, the CIS) often imitate fashion trends in the West. If Russians and Chinese get the impression that fur garments are no longer fashionable, they may reject the product.
Based on editorial press coverage in the US and Europe, however, you cannot conclude that the decline of the sale of fur garments in the West is due to a lack of fashion; the press reacts positively when designers show collections with new ideas. But consumers connect fur garments to cold weather, which means that a cold winter would positively impact the sale of furs in the West.
Furthermore, it cannot be emphasized too strongly that the political and financial instability in the CIS and China means that sales to these markets are connected with big risks. If the worst happens, purchases made by these markets might cease from one day to the next.
In the short view, the rising sale in new markets will compensate for the declining turnover in the West. If we combine this with the expected offering of 1995/96, which is estimated to decline from about 28 million skins to 26 million skins, and the low stocks outstanding, there is basis to believe that average prices will increase in the coming season.
Danish Offering: (last season's numbers in parentheses)
10,640,000 mink (10,564,000) in total, including 1,985,000 scanblack (2,365,000), 675,000 mahogany (359,000), 3,475,000 scanbrown (3,163,000), 3,460,000 scanglow (3,623,000), 35,000 redglow (32,000), 405,000 pastel (472,000), 180,000 pearl (185,000), 145,000 white (135,000), 15,000 violet (15,000), 65,000 silverblue (63,000), 90,000 sapphire (54,000), 25,000 black cross (24,000), 20,000 var. cross (16,000), 35,000 palomino (35,000), 20,000 aleutian/blue iris (13,000), 10,000 var. mutations (10,000). 572,000 mink (477,000) in total, including 413,000 blue (317,000), 90,000 silver (82,000), 17,000 blue frost (19,000), 48,000 shadow/white (47,000), 4,000 var. mutations (12,000).
The Fox Outlook Finnish Fur Sales
by Pirkko Rantanen-Kervinen of Finnish Fur Sales
The Finnish mink production in 1995 is 1.9 million skins, which is a slight increase from 1994. Fox production is 2.1 million skins. Blue fox production, at 1.8 million skins, has slightly increased, while the crop of all other foxes has considerably decreased. Silver fox production is 130,000 skins (150,000 in 1994) and blue frost 35,000 (80,000 in 1994). The Finnish fitch production is 40,000 (70,000 in 1994) and finnraccoon production is 70,000 (85,000 in 1994).
Total preliminary offerings at Finnish Fur Sales will be 4,000,000 West European mink, 300,000 East European mink, 1,850,000 West European fox, 100,000 East European fox, 50,000 fitch, 65,000 finnraccoon and 200,000 Afghan karakul skins.
There are several facts in the international fur trade now which might contribute to a better selling season than last year. For the first time in seven years, there are hardly any unsold skins in the hands of the major auction companies. Also, skin inventories elsewhere -- of both mink and fox -- are rather low. The global mink production is less than before because of a significant drop in the Russian production. The global fox production has increased moderately. The demand for fur skins is expected to increase in new market areas such as Russia, China and Korea, while the consumption of furs in Europe, North America and Japan has unfortunately declined during the past season.
The demand for fur hats, collars and garments has increased rapidly in Russia. Accordingly, many Russian buyers have participated in Finnish Fur Sales auctions, and we expect their purchases to increase this year. They are interested mainly in large male mink. Russian consumers also are interested in fur garments, which are mainly exported from Greece. Therefore we also expect Greek purchases of mink and silver fox skins to be larger than before.
China was the major buyer of Finnish blue fox skins last year. The Finnish blue fox is the most important fur being used for trimming leather garments, both for women and men. Demand is expected to be good this year too. Besides the blue fox, the blue frost fox is very much desired. Also, mink is being used for trimming purposes, but the trend in minks seems to be away from trims and more toward garments, which must be of good quality and design. All manufacturers dealing with China seem to expect an increase in the number of mink garments sold in China this year.
Korea has become a very important consumer of mink and fox-trimmed garments. Korea purchased an increasing number of minks in our auctions last year, and we expect the purchases to grow this year. Korea also will be among the leading buyers of fox skins.
Summary
The most important skin types are brown mink, scanblack, sapphire and light mutations. Prices on males increased strongly in September, because of demand from Russia. Other markets, however, have hardly accepted the new prices yet. The relationship between male and female prices is expected to change.
Blue fox prices increased heavily in March and May, thanks to demand from China. Major markets seem to wish the opening prices to be a little bit lower.
The fur trade today is much more dependent on new market areas, which can be politically, economically and financially unstable. The prices from one auction to the next can fluctuate depending on the purchases of those markets. Therefore it is absolutely essential that all major markets actively buy, in order to safeguard a successful 1995/96 season.
Preliminary Season Offering:
4.3 million mink skins (including 1 million scanblack, 1 million scanbrown, 1.2 million scanglow, 350,000 mahogany, 70,000 pastel, 140,000 sapphire, 80,000 white, 60,000 black cross, 10,000 div. crosses, 90,000 other West European mink, and 300,000 East European mink), 1.95 million fox skins (1.6 million blue fox, 80,000 blud shadow fox, 120,000 silver fox, 40,000 blue frost fox, 10,000 various farmed fox, 1.85 million West European fox and 100,000 East European fox), plus 50,000 fitch, 65,000 finnraccoon and 200,000 Afghan karakul.
Seattle Fur Exchange
by Edward Brennan of Seattle Fur Exchange
The 1994/95 season produced very good results for the entire world's fur trade. As is always the case, several markets experienced outstanding sales results, while others produced only satisfactory results. However, the combined demand for quality North American mink generated successful price levels for Seattle Fur Exchange and our suppliers.
High quality ranch mink, particularly American Legend trademarked mink, achieved substantial price premiums compared with commercial quality mink this past season. Price differentials were fueled by the retail consumers' demand for a quality product and her willingness to pay more to own that product. Blackglama remains the most important and sought-after ranch mink produced in the world. Prices paid for Blackglama mink in 1995 ranged from 35% to 100% above established international price levels for dark mink.
Korea was the world's largest consumer of quality ranch mink this past season. As such, the Korean fur trade was the main purchaser of American Legend mink in 1995. Substantial support also came from traditional high quality fur consuming countries such as the United States, Canada, Japan, Italy and Germany.
We are approaching the 1995/96 pelt marketing season with great optimism. Emerging fur consuming markets have shown increasing buying power at international pelt auctions. In fact, Russian and Chinese buyers purchased substantial quantities of mink and fox pelts during the latter part of the season. At the same time, our more traditional customers are carrying substantially less pelt and garment inventories than in past years.
We expect to see an increase in demand for ranch mink at the world's fur auctions this season. The relatively successful sales activities in our more traditional markets, combined with increasing demand for fur from the new consumer markets, will translate into greater competition for a consistent supply of ranch mink and fox in 1995/96.
North American farmers have had an exceptional growing season. Therefore, we expect to offer the finest quality collection of ranch mink ever produced at this year's auctions. Demand for this quality product will continue to increase as more consumers are exposed to American Legend mink.
Seattle Fur Exchange has earned its reputation for offering the world's finest collection of quality North American mink. Recently, we have added Russian sable, quality Scandinavian ranch mink and Scandinavian ranch fox to our offerings. This year, we are very pleased that Fur Harvesters Auction Inc. has decided to offer their important February collection of North American wild furs in conjunction with our February sale. The combined offering gives our buying customers the opportunity to fill all of their buying needs in one location.
The International Mink Markets
by Mike Mengar & Herman Jansen of NAFA
We are taking an optimistic approach to the upcoming pelt marketing season. We believe that the overall world supply of ranch mink has finally reached a level equal to or below world consumption. All reports indicate that primary auction houses and most secondary sources are holding no inventory, while production levels are expected to remain stable internationally.
The biggest factor from a worldwide supply and demand vantage point is the fact that Russian production has dropped dramatically, while their demand for product has increased, causing the Russians to become net importers of pelts and garments. This, combined with the continuous development of Mainland China, a buoyant market in South Korea, and relatively firm sales results in the traditional markets of North America, Japan and Europe, should create a solid basis for the 1996 selling season.
NAFA expects male mink to continue to see strong demand both for use in trimming and in full garments. Bigger sizes in the males will be paid a premium again.
The South Korean market continues to develop and become more sophisticated, and as a result, female mink are doing better in this marketplace. This, combined with an improvement in retail sales in North America this fall, could lead to an overall improvement for females.
We also anticipate that there will be continued strong demand for blue mink, specifically blue iris and sapphire. Other mutation shades will also find good support, but at lower numbers. The dominant colors of black and mahogany will continue to receive support internationally, particularly the short nap, better qualities.
Demi and wild type mink exceeded many people's expectations last year. We believe this is a direct result of the strength of the Chinese market, which seems to have accepted demi and wild type equally with black mink.
Overall, NAFA remains very optimistic about the strength of the mink market. The fur industry's future lies with markets like Korea and the newly emerging markets in Russia and China. NAFA continues to invest a significant amount of time and money in developing these markets and has always taken a leading role in promoting the products worldwide. We remember well that the industry was at its healthiest in 1987, when there were many markets active. This is the ideal marketing circumstance for which we strive.
Wild Furs & The European Union Fur Ban
by Tina Jagros of NAFA
Everyone in the fur industry is well aware that the biggest threat facing the industry is the pending ban on wild fur imports to the European Union. North American Fur Auctions' ongoing involvement on this critical issue is well known. Leonard Werner has chaired the Canadian Fur Industry Action Committee that was specifically set up to deal with the issue. In addition, I have been the working chair of this committee, coordinating the International Fur Trade Federation, Canadian and American response.
One recent activity undertaken by this group was to send a joint North American delegation to Europe on an educational and informational tour. The group achieved its objectives, meeting not only with national government representatives of five countries, but also with the media. As a direct result of this group's efforts, many positive media stories appeared, including an article in Die Welt, a leading conservative German newspaper. Additionally, the group was able to put forward very forcefully and professionally the Canadian/American position on the regulation. The group was very well received and certainly was able to provide the Europeans with a passionate and rational argument on behalf of the industry.
Very recently, Herman Jansen and myself met with a high-level European Union negotiator to explain to him the practical difficulties involved in implementing such a regulation. A careful walk through the movement of wild fur product made this very clear to the European official and will hopefully influence his position on the issue.
However, with the deadline [Jan. 1, 1996] drawing closer, there is no definitive answer emerging as yet. In general, NAFA is optimistic that the industry will be able to secure a delay based on the further development of international standards (the work of the Trilateral Committee). But this is by no means certain. We firmly believe that the industry's arguments regarding this misguided regulation have been heard and understood by the Europeans. The support of both the Canadian and American governments have been solid and persuasive. As a result of all of these activities, we are anticipating a reprieve, although we are not at all certain about the nature of that possible reprieve.
Despite these problems, NAFA remains optimistic about the future of wild fur sales. Our recent forays into China and Russia have proven that wild fur has broad-based support internationally. Our recently held workshops and fashion show demonstrated strong interest in China for wild fur, particularly beaver and raccoon. Russia has also shown tremendous interest in raccoon and muskrats this year. We fully expect these two countries to increase their market share of wild fur production. At this point in time, China already consumes almost 100% of the North American otter and red fox production. Russia will have taken close to 70% of the raccoon crop. As these markets continue to add new articles to their repertoire, we are confident that wild fur will continue to prosper.
Europe remains important to us both symbolically and as a real market for certain species, like Canadian/American sable and wild mink. North America is also important for certain species including beaver, fisher and lynx. Those markets must be encouraged to continue to use these species and others.
In summary, North American Fur Auctions anticipates that the new markets of China and Russia, combined with our more traditional markets, will result in a market that will see good clearances for most wild fur articles and a positive future in the years beyond.
Western Canadian Raw Fur Auction Sales
by Ted Pappas of WCRFAX
Since my auction handles only wild fur, the outlook on the coming season is somewhat dependent on the European Union ban on many wild fur species, which is scheduled to go into effect Jan. 1. If negotiations are successful and the ban is not implemented, then this coming season, otter, beaver, Canadian sable, muskrat, red, white and cross fox will again be in good demand. Other items such as mink, fisher, lynx, coyote and raccoon will also be wanted at new price levels. Some of these items did not perform nearly as well as they should have.
The following are my expectations about demand on specific items:
| wild mink - fair |
marten - good |
fisher - fair |
| wolverine - good |
ermine - good |
raccoon - fair |
| white fox - good |
cross fox - good |
red fox - good |
| otter - very good |
muskrat - good |
beaver - very good |
| lynx - fair |
lynx cat - fair |
squirrel - good |
| coyote - fair |
timber wolf - excellent |
polar bear - fair |
| blk & brn bear - good |
grizzly bear - good |
cougar - good |
Our markets basically are Italy, Germany, London, Spain and Japan. So far, Asia has been a small market for us. White and red fox, cheap beaver, otter and price muskrats have been their main items. No doubt this market will become very big in the future.
Fur Harvesters Auction Inc.
North Bay, Ontario, Canada
Fur Harvesters Auction Inc., which sells entirely wild fur skins, expects the 1995/96 auction season to be at least as strong as last year, and possibly better, depending on the pending European Union wild fur ban. According to Fred Glover of Fur Harvesters, the company's sale of trapping supplies has increased this year, which could point to a greater harvest.
Uncertainty about the European Union ban leaves auction companies handling wild fur in a situation of much uncertainty. Glover said that European buyers expecting to attend the Dec. 12 auction have even inquired about immediate shipments, trying to get them into the country before the Jan. 1 deadline.
If the ban is implemented, Glover said that certain items sold almost exclusively to Italy, such as sable and wild mink, will take a beating. But beaver, raccoon, coyote and fox will hold their own. The trim market seeks coyote, fox and raccoon, so prices on red fox and raccoon may increase; both of those items have been sold out and in demand.
Beaver, which goes mainly to North America for sheared fashion garments, will probably achieve the same price levels as last year.
Fox is becoming more popular with Korea, one of the largest fur-consuming countries today. This is one of the main reasons Fur Harvesters plans to hold one of its sales in Seattle this year in conjunction with a Seattle Fur Exchange auction. Glover said research has shown Asian buyers attend Seattle sales in greater numbers than they do sales in eastern North America.
