What happened this week: The yo-yo of the market activity continues once again. After the decent previous week interest was reduced this week. Sales were just moderate and the focus was once again more on dairy cows and low grades rather than anything else. Our last weeks market analysis could have been more confirmed than by the present week. With the growing grip of China on the raw material markets price becomes the dominating issue. China means almost exclusively cheaper mass production of goods. This means price premiums for better qualities can hardly if at all achieved and as long as enough material is globally available at the target prices price limits remain valid. In addition remains the European market tightly controlled by the US prices and the currency fluctuation. This is the reason why cows as the more economical hide have an easier time – also due to the furniture season – and heifers and bulls struggle much more. At least the heavier end. Anyway, as already stated last week remains the market still under very tight controls from the Asian and in particular the Chinese market and many in the trade find it difficult to understand, that volume of sales is

not anymore the sole factor for the direction of prices. Other raw material markets had already gone through the same phenomenon before, that China as the production hub  for the world is making the markets – in the good and in the bad. As long as the global growth in leather production is not outpacing raw material supply prices will remain well controlled and one should not underestimating the potential risk, that Chinese buyers could also pull out of the market one day. Only some weeks would already mean something these days with the volumes they absorb these days. Well, for the moment leather demand seems to remain intact and in the position to take up the  hides produced – if they are attractively priced. Other than that, was the continental hide trade again mostly busy with its own little games and problems. The attempts to buy hides from the abattoir of the Chinese successor of the van Buren operation is making some nervous and indeed the market – mainly of fresh hides – couldn’t handle a further fragmentation of volumes. However, the global hide market will not be too much impressed by the tiny games and problems of a microcosmos and any influence on price levels on the selling markets will be limited to a few items – if

any. The new round of abattoir buying will certainly be postponed as long as possible to get as much information from the Asian market from next weeks APLF show in Hongkong. The kill: Always good for a surprise. In preparation of the Easter business increase the kill this week moderately and mainly bulls came in in better number than we expected. This helped a lot to keep supplies smoother than we were afraid of and we sincerely hope, that this can be moved also into next week. Slaughter weights also remained steady and did not continue their decent. What do we expect: Next week will be entirely determined by the interpretation of the APLF meetings. We would be surprised if too much positive is going to be delivered. The market is mostly in balance. The trends for the coming weeks will be set in Asia and if the sentiment is not changed than also prices will not move very much. Cows will have it easier to find homes, but prices have limited room to advance. Other hides could face more pressure if we don’t see a surprising rebound in the US price trend. However, we are starting to enter the low season of leather production and this will have its traditional effects sooner or later. We believe, that our hides will continue to trade in the narrow price band we have seen now for while.