What happened this week: Sales turned out to be quite good as far volumes are concerned. Almost all markets and destinations were present and even Asian customers came back for dairy cows after they had been quiet for some time. Not really a surprise watching the prices for US dairy cows. Unfortunately we had to fight with the consequences of the terrorist bombing in Istanbul and the sharp drop in the USD value, what turned good prices in Asia in just acceptable ones just in an afternoon. We were able to add to the sales in Asia also a reasonable amount of low grades, which were not easy to move for quite some time, but find now constantly better interest. Obviously from tanners trying to average down their buying prices. In Europe the situation was mixed for us. The regular clients booked most of their normal programs which - mainly for bullhides – as usual. Clients were tough in their negotiations and tried to give the market the final strike by bidding excessively down. However, at the end it finished in a fair deal for both parties and we continue to have the impression, that the tanneries who have  

their regular business are operating with a decent margin and would – if they could – take the chance to lock in most of their raw material needs for the coming months, to prevent from raw material price risks in the coming months. This applies certainly only for the ‘premiere league’ of the European tanneries and here mainly for automotive and side leather tanners. Furniture upholstery producers are having most likely a more difficult time at the moment and it seems, that in general their order books are not as sufficiently filled yet. They are definitely the ones suffering most from the present shift of production to the East and the poor state of the central European retail markets. The terrorist attacks in Turkey have again proved how much the raw material and currency  markets can be influenced by external effects which are not predictable at all. Apart from this situation and the threat for the world community also in the future it is obvious, that this years holiday season is the determining factor for the next 4-6 weeks. Timing this year is everything. The medium to long term outlook for the leather business in 2004 remains quite positive and the tanning industry has realized, that the present

price level for European hides is very attractive. Many tanners feel now, that timing is on their side with the long Season this year. Superficially arguments might be on their side, but looking a bit deeper into the crystal ball of 2004 supply for the main hide types could again become faster an issue  than many believe. Many make the mistake, to believe that the falling prices in 2003 were a success of buying patterns and can be continued as desired. They are not and so watch out when the individual positions of the still existing inventories is clarified.  The kill: The kill remains satisfying, but falling back now every week. Mainly males had their time and show already significant declines. The cow kill remains still good and we expect this to continue until Xmas for reasons which are mainly related to the EU policy. What do we expect?: Short term the market is still not ready for a change yet. Sellers in Europe are still too impressed by the situation since September and try just to get into the end of the year with no further injuries. Without a massive round of purchasing from Asia the market just continues to stumble into the last weeks of 2003 and will offer buyers  further opportunities in the coming weeks. The real market is going to develop again after that .