What happened this week: This week was determined by orderly trading conditions.  The interest for hides was almost entirely focused on male hides.  Buyers interest did not only come in from the traditional European customer base, but also again from new customers in Asia. Some larger block deals were concluded during the week. Adding them to the sales to the regular customer base we reached a very significant number of sales for a week in December. Despite the firm tone in the US market we did not see very much interest for dairy cows. The bids offered, were too low to be attractive and did not match with the basis reported from the other side of the Atlantic. So, we passed and decided to wait for buyers who are getting more in line with the present market levels. Except the regular program sales for bulls we received also from Europe little interest for cows, but good inquiry for ox/heifers and low grades again. Interesting was also, that after a long time we had requirements also from the Middle East, markets which only  appear randomly on the scene in Europe. Interesting was to note, that the interest was for bulls, but also for lighter weight materials which

had been neglected for such a long time. Well, one day it had to come back as many of the light weights are cheaper than ever before. News from the retail markets were almost all positive with good initial news for the present Xmas Season shopping. It seems, that there is a good clearance of shoes, leathergoods and also garments, what should encourage the purchasing managers to be more active in their procurement  for the spring/summer season. Also luxury goods are definitely doing better, and in luxury a lot is related to leather. So, the market conditions are brightening up.  Despite all the positive news it will in the short term not reflect in higher leather prices. This, the ongoing changes in the structure of the trade and the still remaining inventories in some hands prevent the market from a sharp turnaround so far and might keep prices still under control for some time. Remains still the fact, that European hides are an attractive option and are detected more and more by buyers which did not pay much attention to our origin. Some excitement caused also the news, that a Chinese buyer took over the hide processing plant of van Buren in Holland. What this means has still to be seen. At least it will create some more confusion in  the market until the clear

intentions are determined. It will be, however interesting to learn which function this operation will have in the future. Well, those who call this a new era, may remember, that this is not the first Asian investment in Europe. Some years ago already a tannery in Denmark was owned by Asian investors. The excitement was not less at that time.  The kill:. The kill is now slowly but surely descending. However, for December we are still quite happy about the total numbers and hope, that we still have another week to go on the same level. Todays published outlook (EU) for the slaughter 2004 indicates only small variations vs. 2003. What do we expect?: The market consolidation continues. Not all problems are solved and all the hides around are sold, but confidence about the future continues to grow. With Xmas in front of us and the world falling into holiday mood we will not see too much activity in Europe anymore. Next week the books for the year 2003 will be closed and the market left to the overseas buyers. They will decide where and how we will start 2004, but we would be surprised if it would be anything else than a steady market with a firmer note to it. This under the circumstances, that the currency market is not going to deliver any further sharp gains of the € vs other major currencies..