What happened this week: Nothing special happened. Everybody is still impressed by the supply bottlenecks for bulls and to a lesser extend premium furniture raw materials. Since all the focus of the interest is concentrated on this part of the market the bullish tone remains intact and was supported with todays sharp price rise on the Zurich auction.  However, even when we sound to be the professional pessimistics we have to deal with more than just the easy products and so it has at least to be mentioned again that the other  ‘normal’ grades are by far not enjoying the same interest and their price movements are more in sympathy or trend related than a reflection of a strong demand. Also prices reflect the situation. While males have already reached again quite reasonable levels and a further increase would push them back into ‘dangerous territory’ remain lighter or low grade hides still on very attractive levels. The real surprise of the market so far is, that in the price/quality ratio various of our hide types remain undervalued in international equations. The interesting question for the coming weeks is consequently if these ‘potentials’ will be detected by the industry or if the isolated market

conditions focussed on few, selected items by an only selected customer base remains the driving force. Sales for the week were more on the low side of the normal range. The real reason for this is: What the market wants is sold and what you got not many are interested in at present. So sales were just concentrated on the few remaining lots of bulls which were snapped up by the market as they became available and – this may be a good sign – interest and sales in low grades which were not seen for quite a long time. Some sales and interest was noted from Asia (Korea and China) for other than the traditionals (dairy cows). This might mean, that tanners in this part of the world realize, that there are more hide options worldwide than just the traditional USA, South American and Australian ones. It might, however, also be caused by supply reductions from those origins and may be it is only a trial phase to enlargen the raw material sourcing for the future. The moderate gain of the € vs. the USD has made export calculations less attractive, but not yet really changed anything in the price spreads seen for a while. Leaving the part of the sales, it is impressive that we have to notice two completely different  situations in the

tanning industry.  On one side we have tanners who want everything they buy for immediate shipment, while others continue to delay shipping programs. Consequently we have had tanneries buying early without the equivalent orders and still  missing them, while others have stayed out of the market until the very last moment and have now to cover immediately the (few?) orders coming in. Basically a lot of tanners could better trade at present within themselves as positions seem to be so different. Whatever was sold throughout the week went at full asking levels, with abattoir prices still not been finally fixed.The kill: Absolutely boring and nothing changed. Still too low on males and market adequate on females. We are following at present the EU subsidies and intervention schemes which might improve - hopefully - the kill shortly. However, nothing decided yet. What do we expect? As long the supply doesnt increase and overseas hides do not correct, the firm tone will persist. We believe that light/medium female hides and low grades have still upward potential while the others are close to critical levels. However, major changes from the asking levels can not be expected with lower bids not having much chance next week.