What happened this week: It is a bit early this year to report about about the weeks activity. Most of the trade is closed until January 07^th this year and those who have reopened on the 2^nd are generally busy with administrational matters rather than being active on the hide market. Not a surprise, since we concluded last year already with the opinion that the raw material market is in balance presently and does not challenge anyone to react in hectic. Most tanners have covered their needs for the current production and can take it easy now for their next round of purchasing with little expectation for major price variation in the short term. Over the last two weeks very little was happening. A few sales to overseas customers when the USD hit periodical highs after Xmas and that was all with the European tanners being on their seasonal holidays.  The end of the year and the beginning of the new one is normally the time for everyone to collect information for the year to come. There was a lot of thinking and discussion of what 2002 might bring for the business world and the interpretation is not easy. If there would not be this general uncertainty and the underlying pessimism the general fundamentals are quite reasonable.

Raw material prices have normalized and supply is seems at least in the bovine department secure. German cattle count has confirmed almost unchanged numbers and this should mean that the kill also in 2002 cant  significantly change from the figures seen in the previous years. The exceptionally cold weather seen in the past weeks should also lift grain quality incremental again over the coming months. Despite many complaints Season sales in Europe have been good. Auto producers for middle class and luxury automobiles are trying to be optimistic and as long as the € trades below parity and the Yen remains weak  import cars (leather) to the USA should remain attractive and consequently  maintain sales reasonably well. Chinas entry to the WTO should support business out there in many segments and also support local demand. Fashion outlook for apparel and shoes is also positive, although this has still to be confirmed by volume orders from the big brand names and department stores. Thinking about furniture: Many trend researchers claim to find a new cocooning effect after September 11^th. If this is true it would be also favourable for the future.

The various trade shows in the coming weeks will offer us more information. The kill: The numbers have been very low until the end of the week and created already a bit of tensions to secure the scheduled supplies of chilled hides. We hope that the slaughter returns to normal soon. What do we expect? We have now to wait until we have fixed the new abattoir prices for January. Next week the world will return to normal and will have a better information how things are developing. In eruope we don’t expect anything else than a normal business with steady demand. We expect  the key factor to be the interest and demand from the Orient. With the present price level and inventories  being reasonable low anything else than a round of buying until the end of the month would be dispappointing and a surprise. This does not mean that we expect a price rally soon, but a steady market. A cautious eye one should have on the €/$ exchange rate as this might not be settled yet after the  implementation of the new currency in January. In addition we think that January will not be  eventful in general and new trends might be only established at the end of the month or beginning February. Then we should also know more about the kill situation again.