What happened this week: The stories of the week were the outbreak of the foot- and mouth disease in England and the freefloat of the Turkish Lira. English hides and skins are now banned at least to the EU but also to Poland and may be many more countries. This means consequently that contracts cant be delivered anymore and new business can probably only be concluded in the processed state. This will short term reduce supply even more and will make things not easier. Sales this week were again concentrated on side leather customers and selected car upholstery tanners. Consequently the interest focussed as many weeks before on bulls and ox/heifers. Interest for cows was again limited what met the reduced supply. However, one can smell that the inventories of dairy cow users are rapidly declining and in case of any uptick in garment leather demand

tanners will have to return to the market. In view of the limited supply of cows and limitations of cured exports this scenario could create additional procurement problems for some tanners. It seems that decisions in this section will be made around mid March. More and more you hear about talks about the financial situation of tanners. In addition it seems that leather prices are not advancing anymore what makes tanners even more resistant for raw material price increases. So the pressure grows and it has to find a way to avoid explosion with the damages going along. The kill: The kill improved a little but weights fell. At least we got now a clear picture about the EU- intervention kill. The tender has been sent out today and until the 07.03.01 the participating abattoirs will be known. Now we have to wait how many farmers are going to send their cattle in. Administrational 

regulations on the collection and processing of the hides are very strict and it will be extremely difficult to handle the collection and processing of the material. However, by the second half of March the program will be on its way. What do we expect? We still don’t see any reason for major changes. The English situation has brought new support to the market and so we expect steady to firm market also for next week with only limited price variation. Looking a bit further ahead into the second half of March we believe that this is going to be the time when the market is going to decide where to go. Many things come together. New abattoir prices in South Germany, the cull kill in progress, the Hongkong Leather Fair in front of us and may be also more news about the financial situation of countries and tanneries..