What happened this week: Generally an exciting week with the focus of the interest entirely on the USA. The flurry of interest seen in America in the previous week was noticed by the world markets this week. This resulted in higher asking levels in the USA and other markets including ours were profiting from the situation which encouraged many buyers to take buying decisions. Those who were available and had still need to buy came to the market. Interest was seen again across the board with prices being steady on males and on full asking levels on cows. With our asking levels being continuously above the market lows during the last weeks one could also say prices were firmer. With the present price levels German hides remain attractively priced and the favourable spread widened even more with the rising US price levels. In some cases the situation is getting peculiar. Considering dairy cows the gap today between European dairy cows and their US counterparts has reached around USD 10,00 just based on the fact that the ban in Korea for German/Dutch hides has not been lifted. This forces Korean tanners to purchase cows in America

and has made them fairly uncompetitive versus productions in China. It does not seem that Korean tanners can handle such a situation for long considering that both are supplying the same markets. Some – including ourselves – were wondering if the recent developments are the change to the better and the turnaround in the market. Considering that we still miss news from the leather market, poor general economical outlook in most parts of the world and unsettled doubts how tanners are or will digest the recent slump in the market we do not believe that the last days were just more than a technical reaction. One could even raise the question how serious the sales were, considering that the US statistical data itself has not been proved to be faithful in the recent past. So, why not publishing figures for market cosmetics? Indeed, it would not be a surprise if hide suppliers and tanners have a mutual interest to stabilize the market to save existing hide and leather contracts and to catch leather buyers interest by the attraction of a rising market. This scenario is only fictive and even if there would be some truth in it we will in our business not get rid of the physical

supply/demand ratio added by cash-flow and warehouse problems . The kill:  Slightly picking up with the first part of the country returning form the holidays. Still good on males and low on cows. What do we expect? For our market we maintain our last weeks statement. Without having a clear picture about a) the leather demand after the holidays b) how many hides/leathers might be stuck in the pipeline c) if all tanners can handle the cash-flow problems a realistic outlook cant be made. For the moment the market has come to a hold and for the next weeks in quite solid state. The weaker USD starts to burden calculations. The expected better kills towards the end of the month should be absorbed by additional short term demand from various tanners who have still to come to the market after their holidays. So, we keep our expectations of a narrow trading range just be influenced by individual sales, further currency news or specific company news from the trade. Dairy cows might even look a bit undervalued and have some upward potential while we consider bulls fairly accurately priced at present. Expecting female kill to rise and male kill to decline in the medium term prices may already reflect today what happens soon.