What happened this week: In total the sales were reasonable even though activity has been slower than in the previous weeks. This was mainly due to a midweek holiday in Italy and the Pirmasens Leather Fair. In addition we have the May holiday next week and the following week the Lineapelle in Italy. All this has changed the mood from exitement to a more wait-and-see position. Sales were again mostly concentrated on ox/heifers and bulls while in cows it was a hand to mouth situation and sales were again limited on European buyers, because Korea has not yet lifted the ban on European hides. With the FaM cases now declining all over and Germany being still free we assume that the ban will be lifted shortly. China is accepting and clearing German hides again and we have been advised that Chinese buyers will return to the European market, since they have regained the confidence that they will have no problems to import the hides into China. Reports from the Leather Fairs speak about further good 

demand for shoes in general but at the same time a major move away from leather to substitution materials and were this is not possible also more and more splits and goats are used. Athletic footwear manufacturers reported excellent shoe sales in the first quarter and remain optimistic for the rest of the year. The economical outlook for Germany is deteriorating and forecasts have been substantially revised. Also car sales in total are declining, while it has to be said that the better names with successful models are still doing well and so the leather demand does not seem to be affected yet. High fuel prices and a dim outlook for the general economy does normally lead to a swift from big ticket items to small ticket items and this leaves at least a significant doubt for the future of car sales for the rest of the year. We think that at best consumers will move to more fuel efficient models but that the interest to simply buy new cars will decline. Reports from the garment business are not particularly good. Although sheepskins remain in short

supply it does not seem for the moment that bovine hides will benefit yet, but we are still off-season  The kill: The cull kill program is extended again and gets us now into the second half of May. Abattoirs make good money with this and most of the kill at least in the North is concentrated on the program. Normal kill is very low and as expected we face an insufficient kill of normal bulls. So the supply of females is good while the kill of males is still down by abt. 50 % vs. normal. What do we expect? Last week we hoped that we would have a better picture this week. This is not the case. With next weeks holiday and the Lineapelle Fair in front of us we do not expect more activity until Bologna. The supply and demand situation is supporting our opinion that the male market will remain steady while the female market is short term well supplied. After the cull kill, however we expect a severe decline in cowslaughter for the rest of the summer. This should be effective from mid June onwards. Until then we expect cows  correcting and males mildly moving.