According to the Brazilian tanning industry, the sector is no longer dependant on the local footwear industry to grow. André Mauricio dos Santos, economist with the Association of Tanners of Rio Grande do Sul (AICSul), the footwear industry now often uses other materials such as synthetics and fabrics. The new situation started developing in 1994 when the Brazilian shoe industry was hit by a major crisis unleashed by the Real Plan.

Of the $1.4 billion in leather exported so far this year, $703.34 million, or 27%, more was exported between January and May than in the same period of last year. As a result of this, the export target of $1.6 billion may be achievable before the end of the year. Of the 43 million hides produced in Brazil, 65% are exported as wet salted or wet blue to producers of furniture and motor vehicle upholstery leather as well as to leather footwear and garment factories.

This change is mainly due to the growth of the Brazilian commercial herd and the increasing hide availability together with a reduced leather demand from local manufacturing sectors, as well as the overvalued Real (R$) and competition of Asian goods both in the domestic and in the international markets.

In terms of exports, Brazilian leather has two major destinations: China (including Hong Kong) and Italy. In the first five months of 2006, these countries imported $242.47 million (34.48%) and $186 million (26.46%) worth of leather, respectively. Exports to the USA grew almost 50% from $55.4 million to $83.4 million. Exports to Indonesia rocketed to $15.5 million, an increase of over 1,007%, while sales to Vietnam grew almost 400%, from $3.3 million to $13.1 million.

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