What happened this week: The week of the Lineapelle could not have  offered more conflicting opinions. For the sake of individual interests plenty of stories and opinions were spread around the fair. Tanners used the chance to meet their suppliers in the traditional November attempt to depress sellers and to  secure and accelerate the present trend of declining raw material prices. From the position of a tanner it might be understandable as many of them have to  commit for some time for leather contracts and their prices. What they can save now and in the coming months could be the key to the economical success of the coming season. In part they were successful and most markets continued their orderly retreat. But one has certainly to admit, that we still don’t see a extensively falling market. Why? Because, with the lower prices demand remains very steady and if one wishes it could even be called good. The lower prices are just a result of a better supply situation and consequently hide prices are adjusting to the reality of leather prices. The

problem now is, that many tanners believe, that they still  have to stimulate the leather demand by further lowering their leather prices as their customers try to make them believe, that the volume of orders is just and only related to the price of leather. This would be true, if all tanners would suffer from a lack of business and orders. However, Bologna confirmed again, that the industry is divided presently into the really successful ones which are not only enjoying a steady business, but are even planning or are already in the process of expansion. Those who haven’t read and adjusted correctly to the change of the market structure in the past years seem to have missed the train already. Our opinion of the fair is, that the companies of all segments with the a good product and the right customers have had a pretty positive result of the Show. As usual this applies more for the outlook, than for the physical business concluded. As far as hide sales were concerned it was one of the better shows. The general pressure on prices mainly

created by again cheap offers from the UK did not – as it would have been normal – result in a buyers strike and to wait for further declines . Quite the contrary: Those who have a clear vision about the future took their chance and bought hides on slightly reduced levels in good volume. The kill: No change really. The kill is moderately declining, but still reasonable. The seasonal weight increase has now stopped and in cows we even saw declines again. For the next 2-3 weeks we believe, that things will just remain unchanged. What do we expect? The next week(s) will be determined by massive confrontations. Those tanners who haven’t bought yet, are the same who believe in a further steep fall in prices. For a sharp drop however, one needs plenty of unsold material in the market and this is presently not the case. So, despite the market pressure and the weak USD reductions will continue to be moderate and we would not be surprised if the market correction is now in its final course. Increasing productions and declining slaughter will have its effects - as usual.