What happened this week: The assumption, that the week would be relatively quiet with reduced trading activity proved to be correct. Although it is already quite normal towards the monthly abattoir buying, that the trading activity declines, we are not quite sure if it the decline in market activity might not be also a reaction to the hide price increases over the past weeks. Looking at the sales this week, they were mostly dominated by less regular destinations. India is one example where we saw various inquiries and some business was concluded. This might confirm, that with the present change to the winter season either orders are already coming in or tanners anticipate them and need to secure raw materials considering the shipping period. However, all in all sales were more bits and pieces rather than regular volumes or trends and spread throughout the markets and customer base. Outside the hide business we sense slightly better interest for sheep and lambskins again, what gives us a bit more hope for the bovine garment leather business for the near future. Monitoring the various markets things are not too much changed. There might be a bit better outlook in shoe leather but we fail to sense anything

particularly better in furniture. Car upholstery business, as far as premium European brands are concerned, remains steady to good with BMW reporting an impressive 14 % increase in sales for February in the USA. Many in Europe remain impressed by the strenght of the USA market and justify price increases here by the levels in America. Indeed, has the spread between various grades again reached impressive levels and we wonder how the gap is going to close. With all the price rises and the excitement about the recent market developments we still don’t like the gaps as they never reflect a solid and sound general market condition nor do we like the noticable delay in shipments now for quite some time. It seems that at least in Asia, but also in some European markets tanners bought hides in December/January attracted by the price but not covered until now with the equivalent leather orders. Considering, that these hides are cheap compared to present levels it is remarkable, that they have not been taken yet. Consequence is, that at least in some parts of the trade a) leather business is not strong enough to absorb the hide production  and b) that sold hides are not on the market anymore but also

not really in production. If leather orders are coming now quickly, no problem. Tanners dispose of price attractive raw materials, if not, there will be in various catagories one day quite a few hides for resale available. It seems at least to us for the moment, that presently quite a few hides and may be also leathers are parked in the pipeline and the sideways. It has to be hoped that the general consensus about a recovery of the world economy will also boost general leather demand to turn the security stocks into cash.  The kill: Still not really fun. The male kill is just about sufficient to keep supplies on track, while cows and heifers remain in abundant supply to cover present market needs. Weights remain in their steady decent, what makes calculations not easier. There is nothing what makes us believe in short term changes. What do we expect? Next week the abattoir prices should be sorted out, with packers asking far too much money considering the market. By the end of the week or the week after we have to see how the market is going to digest increased asking levels, what might close the gap to the USA a bit. To get really directions we need a further stimulus of the market with a round of buying and shipping or the opposite. Otherwise we will continue mostly sideways.