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. Last Updated: 07/27/2016

Furriers Facing Threat of Extinction

MTA visitor at this month's International Fur Festival inspecting Russia's wares.
It's either good or bad news, depending on whether you side with the minks or with those who wear them: Russia's fur industry is under threat of extinction.

Industry professionals estimate that the sector has just five to seven years left to devise a workable survival strategy before it exhausts its resources and dies out completely.

Valued by the International Fur Trade Foundation at over $2.5 billion in 2004, Russia's fur industry's annual turnover is substantial. But since 1991, when government support was all but withdrawn, Russian fur farms' production has fallen from 10.5 million pelts to 3 million pelts per year, the Russian Fur Union said.

This slump goes against the global trend, with worldwide production growing steadily for the past decade.

Russian fur farms, clothing manufacturers and exporters never really adapted to the new economic reality after the fall of Soviet Union and are now struggling to compete against a deluge of cheap imports.

Chinese mink has flooded in from the Far East to the Urals, said Alexander Kovalenko, technical director at the Moscow region's Saltykovsky fur farm, which produces up to 100,000 mink, sable, fox and Arctic fox pelts a year.

"It's cheap," he said of the Chinese fur. "In quality, it's no better than Russian mink, but there's gobs of it, and it's simply stifling our producers."

In addition to growing payrolls and utility bills, Russian fur farms also face financial pressures associated with their geographic location within the country. Kovalenko said that while fish scraps remained the cheapest feed for the animals, shipping it from maritime regions doubled or tripled the cost.

Fur farms were originally built near big cities to facilitate processing, he said, but now Saltykovsky risks being squeezed out of its attractively located premises near the Moscow region town of Balashikha.

Kovalenko said that because the fur industry was a luxury industry, however, it was not seen as struggling or vitally important.

Sergei Stolbov, the chairman of the Russian Fur Union, or RPMS, expressed little hope that domestic producers could compete with cheap imports. "We have to support the entire infrastructure, while they [the importers] have low overheads," he said.

Pavel Golota of Soyuzpushnina, which holds Russia's four annual fur auctions, agreed with others in the industry that so-called "gray," or illegal, imports were a big problem.

He said a disorganized purchasing system was another reason why the industry was having troubles. All over the world, he said, pelts are sold only at official auctions, whereas in Russia, representatives of small-scale businesses prefer to visit the farms personally and pay in cash. This affects the supply at the auctions where Soyuzpushnina sells pelts to Russian and foreign purchasers.

Irina Novozhilova, the president of Vita, a Russian animal rights organization that is a member of the international Fur Free Alliance, said foreign fur could be coming to Russia because it was out of favor in the West. She said Vita, which opposes the use of leather and fur, was campaigning for a ban on traps, used widely in Siberia to capture fur animals, and for a ban on the poison Russian fur farms use to slaughter the animals.

Sable, which mostly comes from hunting and trapping, is Russia's specialty, and fetches a higher price than other furs. Golota said the returns from sable, at $100 a pelt, were the bulk of Soyuzpushnina's annual auction earnings. Soyuzpushnina sells about 300,000 to 350,000 sable pelts per year, he said. Higher-volume mink, mostly farmed, fetches $25 to $30 apiece, he said.

In an effort to showcase domestic production and attract attention to the troubled industry, manufacturers, aided by the Moscow city government, held the month-long International Fur Festival in the capital during October.

Victoria Loskutova, spokeswoman for the International Fur Alliance, a domestic clothing manufacturer, blamed consumers' low level of awareness for the industry's decline. "Only 5 percent of customers are educated -- they know what good fur is, how much should it cost and where to buy it," she said.

Loskutova said she had proposed a solution -- establishing a production, learning and exposition center that would allow Russian fur manufacturers to display their goods in a single location -- and was trying to rally support for it from her colleagues in the fur business.

Speaking at a festival round table, Stolbov of the Russian Fur Union argued that the only chance of survival was if the industry unified. RPMS, which unites just 55 out of more than 3,000 Russian fur firms in all fur sub-industries -- including farms, manufacturers, and traders -- has been successful in lobbying for seasonal tax rates for the industry, and is currently lobbying to raise the customs duties on imported fur, he said.

The union was working on a five-year program for the development of the fur industry that would be used to appeal to the government and potential investors, Stolbov said. The program would seek to boost fur farm output and develop fur processing and sewing companies.

Russia's fur industry has a centuries-long history. In ancient Russia, fur was often used as a kind of currency -- taxes and fees could be charged in squirrel, beaver, sable and other pelts. After settling Siberia, which teemed with sable, Russia became the world's biggest fur supplier in the 17th century.

The Soviet Union produced up to 30 percent of the world's furs, Stolbov said in a statement released by the fur festival. In the 1990s, however, fur farms could not weather high production costs without state subsidies, and many closed down. Production plummeted, and 90 percent of the Russian market was filled with imports.

Russia has now been overtaken by Denmark, Poland and China, Wim Verhagen, chairman of the European Fur Breeders Association, said by phone from the Netherlands.

Worldwide production of mink, the most farmed fur, is about 35 million pelts annually, with 12 million produced by Denmark, the world's biggest fur producer. China is next, with estimated production of 6 million to 8 million pelts per year. Other large producers are the Netherlands, producing more than 3 million pelts per year, and the United States, with up to 3.5 million pelts per year. Russia's mink production is between 2 million and 3 million mink pelts per year.

The International Fur Trade Foundation estimated worldwide fur sales at $11.7 billion in 2003-04.