What happened this week: The week as a whole was generally a non-event. A holiday on Wednesday interupted in many countries the activity and in many companies part of the staff took the chance for a brief vacation. At least in Europe. Since we are also waiting for the Lineapelle in Bologna next as well as for the next round of abattoir busing in continental Europe many market players preferred to wait for the developments of the coming week. So most of the interest was focussed on the currency market as well as on the question if the period of ever rising prices could come to an end. Many different opions are available and while the hide suppliers of the higher quality material can and are still very optimistic have the others – at least – to consider, that there are also some hides and market which do not just enjoy blue skies. One has to accept, that those who are predominantly able to supply, automotive, high substance side leathers and premium quality leathergoods are not only well sold ahead, but also still facing steady if not good demand. This may represent even a larger portion of european hides, but there are still many left – and in our case it is half if not more of the production where the

conditions are not as good.  Hides which are in general sold on USD basis into export markets suffer from the sharp fall of the currency. Sooner or later will also be the leather prices be effected. Since those tanners who are enjoying good business are also mainly exporting it will also affect their margins, latest when their forward sales of the currency expires or it comes to the new price negotiations with their customers. Apart from the currency the rumour about a fraud bankruptcy in Italy was spread around and by late Friday it was confirmed, that again suppliers were cheated by the use of counterfeited money transfer slips. Not the first time and certainly not good for the trust and reputation in general. It can be expected, that more details will be available next week in Bologna and the case will be the talk of the street for the first day. Coming to the limited business during the week, it has to be said, that mainly the shoe tanners were in the foreground. They are mainly monitoring the market for sources of hides which could be used for very high substance articles and we don’t think, that they had too muchof a success. Good news is the fact, that we finally see various tanneries experimenting with light

for light substance nappas. For our taste this took already too long, but might be an option for the coming winter season. We can only hope, that they will be succesful in everybodies interest, as this would give them access for decently prices raw material and us an addional option. The few sales effected were mainly for side leathers and very few heavy cows. The kill: Nothing changes. Numbers are low as well as the weights. The holiday mid-week has as usual dpressed production for more than a week. German has another holiday next Thursday – even worse for the kill. So nothing on the horizon to improve slaughter numbers short term. What do we expect?  Next week everything in Europe will depend on the sentiment of the Lineapelle. In general we reamain cautiious about the situation in Europe. The situation on males remains tightly supplied and so everything will depend on tanners needs in the next weeks. If they are desperate even higher prices could happen. For cows we are less optimistic as for North German cows the correlation factor of the USD on price price is 50 % or more. Depending which is the last level ones bases the calculation, but a decline of at least 5 % in € terms vs. the prices talked in Hongkong should not surprise anyone.