What happened this week: The settlement of the market continued. Although trading activity was relatively quiet reached the number of sold hides again a very adequate number. Asia became active again this week. Prices for many items, such as dairy cows, ox/heifers and low grades have returned again to the levels which have been always attractive for buyers in overseas destinations. European activity was either concentrated on the regular and classical program sales or for prompt shipments. A number of tanners have either got prompt new orders for  immediate deliveries or they had still some production days open which still needed coverage. Most of the interest in Europe was either for low grades, ox/heifers or heavy dairy cows not counting the traditional and regular requirement for bulls. The biggest surprise of the week was however, the sharp decline in the slaughter. Not so much the fact  itself, but it came from a day to another and has hit mainly the males.

After the longer period of better supplies some find it difficult to re-adapt to tighter supplies and to understand, that markets will also in the future remain mainly supply driven. Looking back to the results of Bologna we are a bit disappointed, that the demand for kips has not benefited and the demand for higher quality calf continues to be dominant in skins. Despite the disastrous  state of the German economy, seems the world demand for consumer goods still reasonable enough to absorb most of the productions and the persisting growth in automotive and side leather seems still to compensate for the problems in garment and in part also furniture. Prices during the week eroded again slightly on lighter weight dairy cows but found a floor now. Ox/heifers did very well and bulls got their support from the reduced slaughter. So, one can say that the market has for the moment completely settled in all categories. With the insufficient adjustment at the abattoirs for the month of November a further

correction for December is now needed at the abattoir door to reflect the market  levels which seem to be the present market reality. The kill: The decline which we reported already last week continued also this week and we did not see any recovery in the slaughter of bulls. Cows slaughter was till quite normal, but also here we expect now moderate declines into the months of December. Slaughter weights remain stable. What do we expect? The market settlement continues to be in progress. After a long period of correction a lot of the inflation of hide prices has been removed and many grades have returned to reasonable levels. Checking our indices we are very close to the long term averages and are consequently in the neutral zone. We remain of the opinion that the next weeks should not deliver major surprises on prices anymore. Supply and demand seem still to be in reasonable balance at present. Reduced supplies for the coming months should be taken into consideration for the medium term planning.