What happened this week: Not too much to bother about at this time of the year. Europe has now  almost completely closed down and is not anymore delivering any further activity or news. So, one has to deal with the overseas customers and the morning mails are almost the only communication left. L/C and shipping matters dominate the work at the moment. There is some market activity left and bids are still coming in decent numbers. However, what all sellers around the globe already realize is the increasing resistance against the present market levels. So, any interest coming in at the moment is either well below the market prices and can even not be compensated by the higher USD value, or it is asking for cheap stocks. The number of mails asking for cheap, low grade material has become almost uncountable. Not only inquiries from regular contacts, about also from destinations normally not dealt with. What does  this mean? In our evaluation it is just another confirmation, that prices have reached their upper end for the moment. Not only in Germany or in

Europe but also in other markets of the world. We think, that this is even more dominant in cows, rather than for bulls.  The price level which we have reached for females is close to the historical high levels.  Always when we have reached today’s price levels for cows, the market ran out of steam and eventually corrected. We have not quite yet reached the full level, but we are not far away and so the risk is rising.  Bull hides are still priced on a fair level, but they still suffer from limited outlet opportunities in the Far East and are at least for the heavier end still under the control of the European customers. We are in a difficult situation, because leather business remains quite good, tanners have to buy, but can in most cases not afford the present raw material levels. This can not last very long and the tensions will be resolved one or the other way. The classic is a decline in demand, pretty likely for the coming weeks and an increase of supply, guaranteed from September onwards. The present firmer trend of the USD will help to reduce the pressure on prices, but don’t expect it to absorb

everything. Most important is now to get abattoir prices back under control, as they have run away in the last months and need to be adjusted to safe levels before the higher slaughter begins. All quite difficult, not disposing of a real and active market environment, what leaves everything open for emotions, guesses and speculation. The kill:.  The kill will continue to be very low. Since we are in the peak season of the holidays and this is completely normal.  More surprising are the very low average weights. This would been more normal June and beginning July rather then for and July and August.  We hope, can be through the worst and numbers and weights are going to increase soon.  We shall also be in the position to know in the coming 6 to 8 weeks how the kill is going to react to the new subsidy policy in the EU. What do we expect? We think, with most players being on holidays, that the market will remain steady on paper with hardly any activity around.  Patchy sales to Asia might be the only activity to be expected.  Prices could stay steady in EURO terms, but might see some erosion in US dollar.