What happened this week: It is not the time to write reports. When we thought business was bad already last week it was even worse this week. The only activity worth to mention was the usual pre-holiday purchase round for dairy cows from Italy and some spot business for lower grades to fill the odd production gap before the holidays start. The rest of the market was completely dead and paralyzed. The main reason is the present round of abattoir buying where the emotions dominate rather than commercial decisions. The currency related price correction on the selling market do not find any reflection at the abattoir door and private antipathies dominate over commercial decisions. While the selling market is despite the slow activity relatively steady, have abattoir prices in the meantime overtaken selling prices. Not a situation which can last very long. Although total trading activity hasn’t been too impressive over the last weeks, covers the low kill presently any risk for a real break in the market. As long as the numbers remain so low the market remains trapped in the supply bottleneck and finds it extremely difficult to adjust to a level where the profitabilty for the trade and the tanners can

be ascertained. So far about  the situation for the hide processing industry on the continent. What else can be said about this weeks market. Asian interest has been seen, but nothing serious. It is pretty obvious, that tanners are sniffing around to get a feel for the market and check if there is a bargain available. Also Asians know in the meantime, that interest before the holidays before the holidays may tempt one or the other seller for a cheap sale. However, we don’t think that anything serious has been done, not only because there were very few bargains but also because we dont think that any of the inquiries was really an attempt to buy hides. All of the interest seen came either from Korea or China and was exclusively for cows. This leaves an optimistic outlook for later this month and August where normally the Asian tanners get more active on the European market. Since we are fully depending on the prices in the USA and the development of the USD we have now just to wait for the future of the US cowmarket. Worth to mention is also, that we are please with the L/C opening and shipments. Although a few request for delays had been seen over the past weeks we must admit, that in general

the slow down in shipments this year has not been significant and with the incoming L/C’s and shipping requests during the week most of the outstanding contracts are covered and shipping activity throughout July will remain quite active. . The kill: Absolutely no change. Low and light. With the holiday season in the North being now in full swing it cant get much better. Interesting were the news, that beef prices and market situation enables the EU intervention presently to start to sell beef inventories built last year to support the beef market during and after the BSE crisis. This offers some hope for the kill in the second half of the year. What do we expect? With the hope for a significant reduction at the abattoir being destroyed this week, we cant consequently not expect and significant drop in selling prices for the rest of the month. The USD has settled a bit and the supply is not strong enough to build the necessary pressure in the short term for large declines. So the market will continue to circle around the established levels which are anyway below the asking price. Again it will depend now even more on overseas interest with now more and more tanners leaving for their annual holidays. So, for next week things will stay unchanged