Market evolution: Raw hides and leather (CN 41) — 2015–2025

Introduction

This report examines the evolution of EU external trade in products classified under CN 41 — Raw Hides and Skins (Other than Furskins) and Leather — over the period 2015–2025. This broad product category encompasses the full value chain from raw bovine, equine, and ovine hides (4101–4103) through tanned and crust materials (4104–4106) to finished and further-prepared leathers (4107, 4112–4114), as well as composition leather and waste (4115).

The period under review witnessed a profound contraction in the EU's cross-border trade in hides and leather, accompanied by significant structural shifts in partner geography, pricing, and the EU's overall position in global markets. Import values fell by nearly 59 %, while exports declined by a more moderate 38 %, transforming the EU from a marginal net importer into a sizeably net-exporting bloc. The following three sections unpack these dynamics.

1. A structural shift from net importer to net exporter

The most striking headline of the 2015–2025 decade is the reversal of the EU's trade balance. After starting the period with a modest trade deficit, the EU ended 2025 with a surplus exceeding €650 million — a swing of over €850 million in absolute terms.

The trade balance reversed sharply between 2015 and 2025

In 2015, EU imports of CN 41 stood at €3.74 billion against exports of €3.53 billion, producing a deficit of €211 million. By 2025, imports had collapsed to €1.54 billion while exports, despite their own decline, reached €2.19 billion — yielding a surplus of €658 million.

The asymmetry in the decline — imports contracting far more steeply than exports — is the mechanical driver of this balance shift.

Import volumes and prices fell simultaneously, amplifying the value contraction

Imports declined from 667,496 t to 415,167 t in quantity (–37.8 %) and from an average of €5,601/t to €3,700/t in price (–34.0 %). The combination of lower volumes and lower unit values produced the near-60 % drop in total import value. On the export side, quantities fell by 17.1 % and prices by 25.0 %, resulting in a 37.8 % value decline.

The decline in prices is consistent with a global trend of softening demand for traditional leather in the face of synthetic alternatives, accelerated by the post-2020 slowdown in the luxury and automotive sectors — two key end-markets for EU-processed leather.

EU domestic production surged, reducing import appetite

EU production data show a remarkable increase: output in kilograms rose from 245.9 million to 804.5 million (+227 %), and production value climbed from €1.89 billion to €5.73 billion (+203 %). These figures suggest that, over the decade, EU-based tanneries and leather processors substantially increased their sourcing of domestically available raw material, partly substituting imports. The concurrent rise in export propensity — from 32.5 % to 41.5 % — confirms that the EU's leather sector oriented itself more decisively toward external markets.

2. Deep declines in imports, concentrated in raw and semi-processed hides

The contraction of EU imports was broad-based across product sub-categories, but the heaviest absolute losses fell on the highest-volume segments: raw and tanned bovine hides.

Tanned and crust bovine hides (4104) suffered the steepest volume and value losses

The largest import category, 4104 (tanned or crust bovine hides), saw imports fall from 368,900 t to 227,771 t in quantity and from €1.43 billion to €441 million in value. Unit prices in this segment dropped from €3,865/t to €1,938/t — a 50 % erosion — reflecting both global oversupply and reduced downstream demand.

Two exceptions to the general decline stand out:

• Tanned sheep skins (4105) import value held broadly steady (€136 m → €138 m), with volumes even increasing from 12,607 t to 14,843 t, albeit at slightly lower unit prices.
• Other prepared leather (4113) saw its unit price more than double from €17,048/t to €39,819/t, even as volumes collapsed by 81 % — suggesting a compositional shift toward higher-value niche products.

Export volumes were more resilient, but bovine leather still dominates

On the export side, raw bovine hides (4101) volumes actually increased from 248,846 t to 273,855 t (+10 %), even as their value fell from €453 m to €215 m due to a halving of unit prices (€1,822/t → €786/t). This pattern is consistent with EU producers exporting larger volumes of lower-priced raw material, potentially redirecting surplus hides that previously would have been processed domestically.

Prepared bovine leather (4107) remained the EU's largest single export item by value at €1.46 billion in 2025 — accounting for two-thirds of all CN 41 exports — but this was down from €1.99 billion in 2015. Its unit price remained remarkably stable at roughly €21,000–22,000/t, indicating that the EU maintained pricing power in its core finished leather segment despite the volume decline.

3. Geographical realignment: Asia recedes, European and South American partners reshape

The contraction of trade was not uniform across partners. Some relationships deepened while others unravelled, reshaping the EU's trade geography.

China and Hong Kong accounted for the largest absolute export declines

The EU's two largest export destinations in 2015 — China (€745 m) and Hong Kong (€467 m) — together absorbed one-third of all EU CN 41 exports. By 2025, China had fallen to €342 m (–54 %) and Hong Kong to just €79 m (–83 %). The Hong Kong decline likely reflects both the rerouting of trade flows (Hong Kong historically served as a re-export hub for mainland China) and the broader contraction of the Asian leather-processing industry.

Serbia and Viet Nam bucked the downward trend

Two partners stand out for growth. Serbia grew from €107 m to €166 m (+54.6 %), reflecting the country's expanding leather-processing industry and its proximity to Italian tanneries. Viet Nam edged up from €203 m to €219 m (+8.0 %), consistent with the country's rise as a global footwear and leather-goods manufacturing hub, partially absorbing capacity previously centred in China.

Import partners contracted uniformly, with Brazil the largest casualty

On the import side, every major supplier recorded double-digit declines. Brazil — the EU's single largest source of hides — fell from €557 m to €200 m (–64 %), and the United Kingdom dropped from €233 m to €79 m (–66 %), the latter partly reflecting the post-Brexit reclassification and trade friction effects. Paraguay (–77 %) and New Zealand (–56 %) saw equally dramatic falls.

The concentration of imports increased slightly (HHI from 516 to 609 by value), meaning that the remaining trade became somewhat more concentrated among fewer partners — a pattern often associated with reduced competition and higher supply-chain risk.

Italy dominates both sides, but even its position weakened

At the EU Member State level, Italy accounts for roughly 40 % of EU production, 52 % of imports, and 64 % of exports — a degree of concentration that underpins its role as Europe's leather capital. Yet Italian imports fell from €2.18 billion to €804 m (–63 %) and exports from €2.10 billion to €1.40 billion (–33 %). Other major EU players — Spain, Germany, France — recorded similar, though less extreme, declines. Austria's import collapse (–82 %) is particularly noteworthy and may reflect the closure or reorientation of specific processing facilities.

Supply shocks and price volatility mark a turbulent period

The data reveal several sharp price shocks:

• Colombia (2023): An import price spike of +293 %, detected as an extreme abnormality (score 11.5), though Colombia's overall share remained small (1 %).
• Argentina (2022): A +117 % price jump, likely linked to currency and drought-related supply disruptions in South America.
• Ukraine (2022): A +45 % price increase, coinciding with the onset of the Russia–Ukraine conflict and its disruption of regional trade.

Among export partners, Hong Kong shows the highest volatility (coefficient of variation: 0.76), consistent with its role as a volatile transit market. On the import side, South Africa (CV 0.45) and Argentina (CV 0.32) were the most erratic suppliers, highlighting the EU's exposure to commodity-price swings in developing-economy sourcing.

Conclusion

The EU trade in raw hides and leather (CN 41) over 2015–2025 has undergone a structural transformation rather than a mere cyclical downturn. Imports nearly halved in value, driven by a combination of collapsing volumes and falling unit prices, while domestic production more than tripled. The EU shifted from a marginal net importer to a substantial net exporter, with the trade surplus reaching €658 million by 2025.

The geographic centre of gravity has tilted away from Asia and toward European and emerging partner markets. China and Hong Kong, once dominant export destinations, ceded ground to Serbia, Viet Nam, and India. On the supply side, Brazil, the UK, and the US all saw their role diminish sharply, increasing concentration risk among remaining suppliers.

Italy remains the linchpin of the EU leather value chain, but even its position has weakened in absolute terms. The combination of declining global demand for traditional leather (driven by synthetic substitution and shifting consumer preferences), periodic supply shocks from key producing regions, and a more self-sufficient EU production base has fundamentally redrawn the trade map. Going forward, the sector's resilience will depend on the EU's ability to maintain its competitive edge in high-value finished leather segments — the one area where unit prices have held relatively firm — while navigating an increasingly volatile global supply environment.