What happened this week: Another week were currency trading decisions were at the end more important than hide trading operations. Business was just concentrated on the renewal of the regular programs with the European customers. More difficult than ever before, as most tanners try to use the holiday season as a reason to hide away or to sit the negotiations out in the attempt to depress sellers and the market . Complicated to get to satisfying results under these circumstances. Reasonable forward positions and the expectations of low kills for the holiday season, combined with steady prices almost all over the world, keep positions under very tight control and price variations within very tight limits. Clear signals are now send from China, that access to credits and finance has become significantly tighter. Letter of credits are coming in slower and extended payment terms have become completely common. How hard finished leather price negotiations all over have become, can also be

checked now even in Asia, where buyers also increasingly try to find cheaper alternatives to their regular raw material supplies. So, the process of downgrading raw material qualities to meet finished leather target prices continues and one has to speculate how far the process can be driven, since it has definitely limits. For the moment remains at least the hurting problem, that the middle price section of finished leather has almost completely disappeared. For German hides definitely a temporary problem, but at the end it will sorted out by the market developments – as usual. For the time being prices remain still reasonably well protected, because alternatives to German hides are not cheaper and in many cases even more expensive. So, if one has no specific preferences and needs to cover raw material, the German hides is still one of the potential and favoured options. This has also in the past weeks been the main reason for the sales been made. So, the best performance this week was again in the side lines. Garment leather

seem to have a good season on front of it. Skins are bought, despite the same price fights as on hides, but one can feel the interest is backed by demand for leather. The flurry of interest for cheaper light weight material has disappeared, but for the next season and the time after the summer holidays one can also be a bit more optimistic again. Fashion seems to work for us. The kill: The kill wasn’t even bad this week. For the time of the year and forecast made production was above expectations. However, this seems to be regional as reports from different areas are not the same. Published forecast for the next 6-8 weeks are very pessimistic with strong influences of the holidays being expected. What do we expect? As long as not one market will set a really new trend, nothing will change. We believe, that cows will see more difficulties in the next weeks and would need another round of buying from Asia, while males face resistance, but at the end will trade around the levels set now for a while. Price changes will continue to be more a result of external influences, rather than change in the market yet.