What happened this week: Nothing else than the expected extremely difficult market situation. The present prices paid at the abattoirs are unobtainable and every deal is just a fight to minimize losses. Demand was relatively slow and the businesses concluded were primarily with the regular buyers which were fighting to keep their purchasing levels as low as possible in the present market. So, bulls were again the easier part of the business with at least demand allowing sales. However, from the recent surge in prices only one third – if one was lucky – was absorbed by the buyers. In all other catagories (cows and ox/heifers) buyers have put a hold on prices and also the Asian activity on dairies dried up with asking levels surpassing the 50 dollar mark. Several larger sales of dairy cows were reported into Italy, but at levels which were hardly any better than the prices we had seen mid May. So, here the losses are fully absorbed by the hide processors. We have to consider, that the market is still divided into the Asian and the European business and the situation of the majority of european tanners is significantly worse than the ones in Asia. During a trip to the

Mediterranean this week it became obvious, that the depressing retail markets in Central Europe and in particular in Germany are causing many tanners a big headache. Shoe tanners report an order decline of up to 30 % due to the poor consumption. Those tanners who traditionally emphasize on this market are not only depressed by the reduction in sales but also the bleak outlook as they fear that retailers are not able or very cautious to replenish inventories for the next season. Who is still enjoying good business is fighting with present raw material prices as no one expects to increase prices for the next season to sufficient levels. European car sales released this week were also depressing with a decline up to 10 % in total and only one premium brand (BMW) was able to show reasonable gains. Even if everyone says that the penetration of leather and the export sales of cars are outpacing the declining numbers , we have seen already in the past that the supply chain was more based on budgets rather than on real sales and so things have to be watched even more carefully than in the past. Everything continues to be export oriented as not too many are particularly optimistic for the near future of Europe.

Total sales of hides were just about sufficient with with most interest and sales in bulls or lightweights. With the weaker USD European hides are not anymore particularly attractive in price and are consequenlty not anymore filling gaps overseas as they used to do since beginning of the year. The kill: The kill remains extremely low and light. Not really unusual for the season but a bit frightening for the months to come as we only start the school holidays end of this month and so one has to wonder what we still have to expect. There is hardly anyone who expects any improvement until end August. What do we expect?  Things will drag along until the supply improves. The low production will not too much pressure on the market. However, one can see that sellers get more nervous with the present situation, but have little chance to adjust prices. This will last until the end of the month when it will be clear if abattoir prices can be readjusted to realistical prices. Until then trading volume will remain more or less on present levels with only the numbers traded which are indispensable for buyers and sellers. Prices should not change very much in the meantime. We would also not be surprised if financial questions will determine business again