What happened this week: Again not much to report this week. One gets the feeling that after all the turmoil over the past 12 month things are all over returning into equilibrium at the right time, i.e. for the end of the year. The kill remained very high and so all spot inquiries could be satisfied and the market remained pricewise completely stable. Our hides remain very attractive in the international price structure what was also confirmed by bids which came in from odd directions which are hardly seen in normal times. The special destinations normally turn only up, when the price for the German hides is attractive enough to decide ‘in dubio’ for quality rather then for price. That gave the chance for various unexpected spot deals. Furthermore we were quite happy to see many of our regular customers trying  sensibly to increase the volumes of the regular programs. Without mentioning this might mean, that a) they are operating at a profit and b) they either dispose or are hopeful for further leather orders in the New Year at similar prices. Now they try to make sure to cover the raw materials at present market levels as well. This is very good news in our opinion as this means that things – at

least for some – are turning to the better. The outlook for a period of low interest rates may have simplified the decisions as well. We havent seen any interest at all from the Far East this week while american sources reported an increase in orders after the recent price correction in the USA. Eventually our hides might have lost some of their attraction, since they are more gap fillers anyway. Having said this about the Far East we were surprised about the amount of inquiry (not sales) coming in from India. Plenty of requests for lighter weight hides, but we fail to understand if this is just sniffing around, obtaining raw material prices for calculation purpose or finally raw material needs against exisiting orders. Should we see serious bids arriving over the next weeks we will know more. In general it reconfirms, that shoe biz cant be too bad worldwide. Interesting was the statistical data released today in the USA that business inventories fell at 1,6 % led by auto and retailers. This is confirming that stocks are indeed deplenishing and should need replenishment – under normal cirumstances – except  cars. Now we have to see if general confidence is strong enough to start with the replenishment operation

and when. At least is the threat of burdening inventory levels is limiting further. The kill: Due to the intervention schemes also this week we saw fortunatly a high kill level. Forecasts for the coming week expect high slaughter until Wednesday. After Wednesday the kill will be minimal until the end of the year with seasonal holidays limiting production days to the minimum. Also the first week of 2002 does not offer any opportunities for higher slaughter. Interesting will be the result of the present conflict in Europe about the extension of the 30+ month intervention where mainly France, the EU commission and Germany have conflicting opinions. France wants extension and Germany not. The result will effect the supply in the first half of 2002. What do we expect? Nothing, really! Everybody is quite relaxed and supply and demand for the moment seem to be in a seldomly balanced situation. Except speculative action we think this has a fair chance to last for a while. Only a major change in the supply or demand patterns could give new directions and we do not anticipate this before mid January. We hope that the speculators don’t get already greedy before. It would not be good for any of the serious members of the trade.