What happened this week: Well, tough times at present. With the production season returning further to normal pace, the market struggles to find himself a safe ground. Most tanners feel it is now the time for the long expected corrections and this applies mainly for the classical categories which have been so long dominated from the demand of the Far East. May be it would be easier to judge appropriate market levels if the USD exchange rate would not be such an unknown factor. We have lost already about 3 % since beginning of the month and forecasts are very difficult when logical parameters fail at present. The rising oil price is also starting to worry even those, who for long consider this to be a factor to be neglected. Even with decent economical news about global growth and consumer confidence in Europe many are not anymore convinced, that this could eventually turned into more demand and higher prices for raw hides. However, the strongest market impact today are the disappointed expectations about the situation  of the Chinese

market. Most expected the growth and dominance of the first half of the year to continue and were consequently relaxed about the slow start after the summer holidays in Europe. With the higher kill and the continuing absence of the Far East in the European markets many realize now also in Europe, that there are cheaper alternatives in the world and it might not just be a lack of finished leather sales, but the sufficient and available  cheaper origins which are in the position to satisfy the need of the mass producers today. So far the bad news of the week. The rest was a bit better with at least adequate interest again for heifers and bulls. Also here price concessions have to be made, but at least still within a normal and acceptable range, what pronounces again the need for price reductions at the abattoirs for the next round. Interesting is, that we see now what we expected already for May with the new member States joining the EU. A lot of cattle is or has been slaughtered in the West and production is consequently now low in the new members. As a

result are not only prices for hides high, but also are now local tanners facing procurement and quality problems. Some of this is now covered in the West with great difficulties to digest the higher than calculated price levels. So, the week can be called a sellers challenge with only partial success and disappointment in the Far East. The kill: Entirely steady on levels we would consider to be normal for this time of the year. Weights are very slowly rising and it will be interesting to see what the colder nights will mean to the offer of cattle in the coming weeks.  What do we expect? The next week we see China on holidays and the Koreans back. We have no reason to believe, that this will stimulate the demand from Asia and most likely  they will - and can -  wait for the final results of the negotiations with their finished product buyers in the coming weeks. In Europe most will wait for the results of the abattoir buying for October. If the necessary adjustments are made (10-20 %) we could arrive to levels where normal trading will be possible. Leather business as such is ok, if the raw material price fits.