What happened this week: The two weeks after Bologna trading activity was reasonably quiet. This weeks sales activity was reasonably active again and the total number of hides sold was fully satisfying and sufficient. We refrain from the usual complaint about margins, but again it was  almost not possible to convert the better interest into sufficient selling  prices. This is nothing new and the trade has also to accept, that the margin problem is entirely related to purchasing prices of hides. Interest was across the board, but again – as usual – the selling of bulls and in particular of ox/heifers has been substantially easier than the sales of cows. Impressive remains the inquiry for heifers. Shoe and automotive tanners seem to have particular need for this type of material which is unfortunately now in the lowest production season of the year and we had to leave a lot of interest unsatisfied. The price spread between heifers and cows is consequently further widening what reflects nicely the situation on the leather markets with standard upholstery leathers still being in the doldrums. Dairy cows needed the full attention of the seller to move enough hides and one can only hope, that shipments are

going to be taken according to the contracts to make sure, that product flow also over the next months is secure. We remain impressed by the difficulties to obtain acceptable price levels. Taking the official price levels of US dairy cows into consideration we should have been able to get abt. 10 % more for the hides one could finally obtain. And so remain selling prices - at best - stuck in the middle of the normal trading range of USD 45-50 for standard products and weights. Fortunately the currency was not an additional burden what made the ‘take it or leave it’ decision a bit easier. However, the question if European cows are too cheap or US dairy cows are too expensive remained unanswered also this week. At least one can still sense, that still some of the less preferred European origins dispose of reasonable unsold inventories and getting a bit more nervous with the summer holidays approaching fast. Good quality extra heavy weight cows face less problems and remain still well received by European upholstery tanners. Strong was also the interest again for cheap and light kips. Although it is always a price and quality battle one finds still a number of interested parties, in

particular from Italy to choose from. The only other interesting market news was the finally confirmed bankruptcy of a smaller German processor and the changes in management staff in one of the leading names of the German hide and leather trade. Both of them cant be seen as a positive sign of the situation in the trade and puts a clear light on the problems companies have to deal with at present.  The kill: The kill remains steady on the low levels. A holiday on Monday was cutting again into the total production and avg. weights  especially for bulls are falling rapidly. Both developments are not helping at all in the present situation. Also for the coming weeks we have good reason to believe, that there is going to be not any improvement in numbers.   What do we expect? For more than 8 months we haven’t seen a price variation of more than 5 % and there is no reason why this should change in the next week(s). While bulls and heifers continue to stay on rock solid ground, remain cows below 40 kg under latent pressure which is only eased by the firmer USD. The battle here is fought between the European sellers and Asian tanners as we don’t expect any particular movement from Europe anymore. It is going to remain difficult.