What happened this week: Another not very exciting week has come to an end. Sales were not exciting either, but they were also not disappointing. And so one could say, that the predicted equilibrium of supply and demand continues to be fully intact. While in our traditional hide categories sales were just effected to our regular program buyers, we were very please to note, that finally the demand for lower quality hides had sharply increased and despite not all orders were accepted a large volume of material was sold. With some interest left open for over-the-weekend there is a very good chance that also next week could end with another clearance of low grades, what would finally clean up the availabilities. It has to be mentioned, that the sales had been effected exclusively to the non-funiture customers. We

remain surprised by the general absence of the Italian market after the holidays. At least in our case we haven’t seen too much interest so far. Neither from Arzignano nor from the Tuscany  much activity was seen. As far as dairy cows are concerned we just heard about a few bids at the low end of the price range seen prior to the holidays and we think, that this is below present market levels. However, it confirms, that the furniture upholstery tanners are not yet in an immediate need for hides and still not sure about the market. It has, however to be mentioned, that many of the Italian customers had fairly well covered their September production already in July and are in the position to take things easy until they have a clear picture about the leather articles and the demand from the markets. This will most likely need the feedback from the fairs.

The Zurich auction today also remained practically unchanged. The kill: We are disappointed about the present kill. When normally the slaughter starts to pick up latest at the end of August, we haven’t had anything of that this year. Abattoirs complain about high live cattle prices and insufficient sales of beef and generally poor business. They don’t give any indication for a change and the good weather conditions are also not inviting farmers to sell their cattle yet.  What do we expect? We still fail to find an immediate reason for a market change. There is neither excessive demand nor supply and the reduced kill is presently enough to keep the ball rolling. Only a abrupt major change on either side could disturb the situation at present. As far as buyers are concerned it seems they are covered to wait for the results of the various fairs and for sellers seemingly the same applies.