What happened this week: Lineapelle! Most of the trade went fully convinced to the show in Italy that things would be bad. There will be – as usual – a large debate about the attendance, results etc. and it will depend again much on the person you speak to what the view is going to be. In our case we have been positively surprised. While during the first day attendace wasn’t too good many felt already, that their prejuduces would be confirmed. However, as more the show proceeded as more many faces got relaxed and by the end on Thursday there was a general consensus, that leather business in total was better than the expectations. Many tanners even admitted, that they had been pleased with the results and carried sample orders and colour instructions home. Quite a few found the confirmation that leather business hasn’t come to the feared stop and with all difficulties also the leather trade can presently assume, that the global economy could see some better times ahead. As positive this may now sound we are not neglecting the problems which also can been seen and which accompany us at least inin Europe still for a

while. The fact of the matter is, that a sizeable part of the tanneries have to accept, that production have moved East in the past years and the orders many still expected will neither come now nor return in the foreseeable future. This is hitting all those who havent taken their action to protect against this situation in time. Mostly tanners of a medium size and in the medium/lower quality range. Either their customers have left or they are not anymore competitive in the segment they operate in. Many of the others will complain, that orders came late and the so called long term production programs are not anymore available, but still they took a much better feel for their future home. We couldn’t see any part of the leather business being favoured in particular and the statement made before applies in our view for almost all segments. Sales of hides were possible across the board and  at steady levels. The firmer USD helped also here and there and the only nightmare remained the low grade, extra light weights which again did not find any substantial interest. This is even more disappointing, because Bologna was the hope that the leather types made from this particular raw material would return into fashion. However, a bit of

 hope is still in, because various larger producers of uppers stated the opinion, that for the next winter season calf/kip leathers will see a strong performance because of their attractive price levels and indeed have f.e. casualty calf in the meantime fallen to almost historical lows. Cows are still finding a lot of resisitance in the market – also due to the high seasonal kill – while the surplus of bulls have been in the meantime reasonably well absorbed. The kill: Still consolidating in the North, while the South still reports the highest levels of the year. Another 2-3 weeks and than the slaughter numbers will settle down again. Weights are lower at present, than what we would expect for this time of the year. What do we expect?: Also for the coming weeks we don’t expect yet a rebound of the market yet. However, with the better tone in the market at least stability can be generated and if we are not completely wrong one can also expect a certain safe base now being laid. Mainly male hides from Europe look attractive in international terms while cows are also quite fairly priced and will consequently move now with the US and currency fluctuations. If the better news from the economy can be sustained we see a fair chance to into a friendlier tone when the year heads otward the end.