Brazil’s Leather Export Slump: Weakening Demand in Key Markets Clouds Outlook Despite Emerging Market Gains

Brazil’s leather industry, one of the world’s largest leather exporters, reported exports of $89.5 million in May 2026—a decline of 7.3% compared to May 2025. The downturn extends beyond a single month: exports also declined 5.1% compared to April 2026, when shipments totaled $94.3 million. More troublingly for the sector, leather exports during the first five months of 2026 totaled $450.8 million, down 7.8% compared to the same period last year.

The data, analyzed by the Centre for the Brazilian Tanning Industry (CICB/Brazilian Leather), paints a picture of an industry under pressure from multiple directions—with implications for tanners, exporters, and the broader Brazilian leather ecosystem.

Export Volumes Tell a Mixed Story

While export values declined, export volumes presented a more nuanced picture. In May 2026, Brazil exported 13.9 million square meters and 49.1 thousand tons of leather.

Compared to May 2025, export area declined 6.3%, while export weight increased 9.8%. This divergence suggests that Brazil is exporting heavier—likely thicker or less processed—leather, while achieving lower prices per unit. It’s a potentially worrying trend: shipping more weight but earning less revenue indicates pricing pressure or a shift toward lower-value product categories.

The month-to-month comparison with April 2026 shows both area and weight declining (13.0% and 11.6% respectively), indicating slower shipment activity during May rather than merely a mix shift.

Key Export Markets: Slowdown Across the Board

Brazil’s leather exports are concentrated in several major markets, and virtually all recorded declines during the January-May 2026 period.

China: Still #1, But Weakening

China remained the largest destination for Brazilian leather exports, accounting for 29.3% of total export revenue ($131.8 million). However, exports to China declined 9.8% in value and 3.6% in area compared to the same period last year.

The slowdown reflects continued caution in China’s manufacturing sector, particularly in footwear and upholstery production. Chinese tanneries and manufacturers appear to be operating more cautiously amid uncertain domestic and export demand conditions.

United States: Steepest Decline

The United States remained the second-largest export destination, with shipments worth $51.7 million (11.5% of total exports). But the U.S. recorded the steepest decline among Brazil’s major leather markets: export value fell 22.9% and export area declined 13.0%.

The decline reflects weaker demand from U.S. furniture and automotive manufacturers. Both industries have faced demand headwinds: furniture from housing market slowdowns and shifting consumer spending patterns; automotive from production adjustments and inventory management.

Italy: Strategically Important Despite Decline

Italy ranked third, with exports totaling $49.2 million (10.9% share). Exports to Italy declined 21.2% in value and 17.6% in area. Despite the decline, Italy remains strategically important due to its concentration of luxury goods manufacturers and tanneries that use Brazilian leather as a raw material.

Vietnam: Emerging Bright Spot

Vietnam ranked fourth, with exports worth $45.9 million (10.2% share). Exports to Vietnam declined only 6.4%—a smaller drop compared to other major destinations. This relative resilience reinforces Vietnam’s importance as a global hub for footwear and leather goods manufacturing.

Leather Type Performance: A Shift in Export Profile

The data reveals interesting dynamics across different leather product categories.

Finished Leather: Sharp Decline

Finished leather remained the largest export category, accounting for approximately 44% of total leather exports ($194.2 million). But finished leather exports declined 18.4% in value and 16.8% in area—the sharpest decline among major categories.

The steep drop reflects weaker demand for higher value-added leather products, particularly from footwear, upholstery, and luxury goods sectors. When brands and manufacturers are uncertain about end-consumer demand, they tend to reduce orders for finished leather, which is the most expensive leather category.

Wet Blue: Relatively Resilient

Wet blue remained the second-largest export category, with exports reaching $123.1 million. Exports declined just 2.1% in value, while shipped area remained largely stable (decline of less than 1%).

The relative resilience of wet blue demand suggests that tanneries continue needing semi-processed leather, particularly in Asian markets where further processing occurs locally.

Crust Leather: The Growth Exception

Crust leather was the only major leather category to record growth: exports reached $48.2 million, increasing 8.3% in value and 20.0% in area compared to the same period in 2025.

The growth indicates stronger demand for intermediate-stage leather products—those that require additional finishing but offer manufacturers more flexibility than fully finished leather.

Raw Salted Hides: Dramatic Decline

Raw salted hides exports totaled approximately $29.9 million between January and May 2026, representing a stunning 57.4% decline in value compared to the same period in 2025.

The collapse in raw hides exports points to reduced international demand for untreated Brazilian hides—likely reflecting both weak tannery operating rates in key importing countries and increased availability of domestic hides in those markets.

Market Outlook: Pressure Persists, But Adaptation Visible

CICB, the Brazilian tanning industry association, noted that Brazil’s leather exports continue facing pressure from weaker demand in traditional markets. China, the United States, and Italy together account for more than half of total export revenue, so declines in all three create substantial headwinds.

However, CICB also highlighted positive growth in several emerging markets, including South Korea, Spain, Indonesia, Cambodia, and Turkey. These growing markets are helping offset part of the decline recorded in major destinations.

Perhaps most interestingly, CICB noted a shift in Brazil’s export profile, with shipments increasingly concentrated in less processed and semi-finished leather categories. While finished leather exports declined sharply, products such as salted hides and crust leather recorded strong growth.

This shift could represent either a concerning devaluation of Brazil’s leather exports (selling less processed products earns less revenue per unit) or a strategic adaptation to changing international demand patterns (global buyers want semi-finished leather they can process locally).

Conclusion

Brazil’s leather export performance in early 2026 reflects an industry navigating a challenging global demand environment. The declines in key markets—China, the United States, and Italy—are substantial and broad-based across leather categories.

Yet the data also shows an industry adapting. Growth in crust leather exports, relative resilience in wet blue shipments, and expanding sales to emerging markets all suggest that Brazilian leather exporters are finding ways to adjust to changing global demand patterns.

The question for the remainder of 2026 is whether demand in China, the United States, and Europe will stabilize or continue weakening. If traditional markets remain soft, Brazil’s leather industry will need to continue diversifying both its export destinations and its product mix. The foundations of a world-class leather export sector remain in place—but current market conditions are testing them severely.

---

Source: Leather News (https://leathernews.org/brazil-leather-exports-fall-7-3-to-89-5-million-in-may/)