What happened this week: The summer starts early this year. General activity was once again reasonably quiet and it seems, that business is turning more and more into holiday mode. The regular programs with the European customers are proceeding on a steady basis, but any additional demand which would trigger some market action can not be determined. Activity was also hindered by a holiday on Thursday in most parts of Germany.  So, most activity derived this week again from overseas. The up and down of the USD made trading almost impossible at the beginning if the week while towards the end of the same a satisfying number of sales where generated. In the focus of the interest were again dairy cows which sold in acceptable volumes. However, only a very lucky hand in the currency market made prices acceptable. Unfortunately was the attempt  to reduce abattoir prices significantly for the month of June unsuccessful. Various of the classical political games and the low kill gave butchers again the

upper hand and consequently remain processing margins insufficient. Many do not take the increasing costs due to the lower production and also the lighter weights into consideration. The fight is now back on the selling side. Apart from the seasonal effects leather business seems to be quite intact. However, one has to realize, that tanners – at least for mainstream products - have become more and more flexible and buy hides increasingly with a target price system. Since we have for quite a long time no substantial gap between global demand and supply of hides, market volatility has declined and tanners interest is just shifted on to the origins which are willing to meet the target prices for raw material, whenever prices started to move out of the target frame. With currency fluctuations, seasonal influences of production and the massive purchasing power of finished product buyers, hides were always available at a certain price somewhere in the world to satisfy demand. We fail to foresee any short term

change as there are almost no signs, that the balance of physical supply and demand is going to be remarkably disturbed over the summer. Determining will be, if the European holiday season can be compensated with enough business and shipments overseas. The kill: The kill remains quite steady. Watching the numbers, they are seasonally lower, but they are better than we really expected and bottlenecks have been avoided so far. The Russian ban on EU imports has been lifted and this negative impact has also been lifted. We still have another 4 weeks until the holiday season really starts and expect no real changes until then. What do we expect? We can only assume, that the market will continue to sidestep. We can not find any reason why a new trend will be established and changes of prices will be more a reason of coincidence, feelings, currency or emotions. In the next weeks most of outstanding contracts until the summer holidays will be booked. As far as prices are concerned we expect only adjustments to be made where previous levels are not adequate.