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A buyer looks at the fur of farmed fox at the 2015 China Fur and Leather Products Fair in Beijing, January 15, 2015. The fur industry is one of the more overlooked victims of recent global economic turmoil.Reuters

In China, some of the fur buyers are in jail, while others are under investigation. In Russia, a plunging ruble and economic sanctions are keeping the mink-clad jet set at home – often in very real ways, with wealthy buyers unable to secure travel visas.

It has, in other words, become a bad time to sell fur, most of which has traditionally gone to those two countries. Now a double set of misfortune has slashed prices and hurt the outlook for an industry that had been in the midst of a comeback from the dark days of animal rights criticism. Fur has become one of the more overlooked victims of recent global economic turmoil.

"The whole fur market has been hit by [these] two biggest markets being in trouble," said Mark Downey, the chief executive of North Bay, Ont.-based Fur Harvesters Auction Inc., which sells a large percentage of Canada's wild fur. The impact in China alone has been "huge. Big time," he said. "A lot of customers have been investigated, have been incarcerated, had to pay back taxes, stuff like this. And a lot of the others are running scared."

Fur had been on a roll. Eye-popping auctions in 2013 saw mink fetch an average of roughly $100 (U.S.) per pelt, high enough that many farmers were smiling at 50 per cent profit margins. It was the culmination of a gilded decade, which saw global fur sales rise 44 per cent to $15.6-billion (U.S.) in 2011-12, the latest numbers released by the industry association International Fur Federation. Fur adorns the roaring sales of Canada Goose coats and its lookalikes, and has made an appearance in more than two-thirds of recent designer fashion collections, the industry calculates.

China has been a huge part of fur's success. Asian sales now make up more than a third of the global total, more than any other region. Add in Eurasia – dominated by Russia and Ukraine – and nearly two-thirds of sales go west of the Pacific.

But last year things turned around abruptly, with prices falling nearly in half. China is in the midst of a broad corruption crackdown that has dug deep into an industry long accustomed to operating in grey areas. Russia, meanwhile, continues to face a sliding currency that has damaged its people's ability to buy foreign goods.

And the blows have kept coming. On Jan. 1, China removed a tax exemption that had allowed tariff-free imports of raw farmed mink and fox pelts, so long as those pelts were then exported after being made into garments and scarves. But the rule faced rampant abuse and at the beginning of this year, Beijing began taxing all farmed mink and fox imports, although it cut the rate by five percentage points to compensate.

It did not, however, give a similar break to wild fur pelts, adding new pressure to a Canadian industry whose product was worth $14.8-million (Canadian) in 2009-2010 (Statistics Canada no longer gathers fur industry statistics). Wild fur is still subject to a 20 per cent import duty; the International Fur Federation is lobbying Beijing to change the rules.

At the same time, fur sellers face a glut of production in China, where farmers raced to grab prices while they were high. China now harvests an estimated 40 million mink per year, a number that has tripled in under a decade. Joe Morelli, the chief executive of American Legend Cooperative, the Seattle-based fur auctioneer that is the world's oldest, estimates global buyers want 80 million mink pelts a year, while farmers are growing 90 million.

To worsen matters, a warm winter last year in northeastern China, the country's main fur-buying region, meant fewer customers. Stores "carried over roughly 50 per cent of their garments," said Mr. Morelli. And a sweeping law enforcement crackdown, which has coincided with the country's broader anti-graft campaign, is having a direct effect. "One of my biggest buyers got arrested two years ago. He had 100 different fur stores through China," Mr. Morelli said. "He's on trial right now, so he's not in my auction any more – which affects the price I get."

Yet China remains so vital to the market that the fur industry keeps coming, in hopes of making more sales. A colder Chinese winter this year is helping with demand. Then there's the possibility of selling new products, like harp seal fur. Last year, Atlantic sealers harvested 55,000 seals, down from 91,000 the year before, and far off the allowable catch of 400,000. With the European Union, and even Taiwan, banning seal product imports, "the Asian markets – China, Korea, Japan – they're three good markets that are still left," said Bernie Halloran, a St. John's furrier, who was in Beijing this week at the China Fur & Leather Products Fair. "China is the biggest of them. So we're trying to open up here."

He has partnered with Kevin Zhao, a young Chinese entrepreneur who studied at Memorial University before returning home with an ambition to bring seal fur to China. Mr. Zhao now has a small 480-square foot location in Shenyang, a northern city, in a mall across from Gucci and Luis Vuitton stores. Fur sales may be down, but he is banking on seal coats, purses and arm bands being different enough to strike interest. He plans to open the store in May.

"Chinese people right now are thinking about fashion," Mr. Zhao said. "Right now the mink market is not so good because everybody can farm minks. But wealthy people are looking for unique products, really good-looking standout luxury stuff. It needs to be unique."