What happened this week: Most of the trade was waiting to see what the impressions are from the Lineapelle fair in Bologna this week. A reasonable amount of visitors were seen, although a number of people were claiming that the attendance was not  too large we dare to say, that it is not just the number of visitors, but also the quality and here you found hardly anyone complaining. Same applied for most tanners and their business. Again there was little concern about the business and the orders and most quality tanners seemed to be quite relaxed and happy with the business and the outlook. So, most of the talk was related to the raw material market and the further development of the same. The number of people expecting the market to slump in June/July is declining as most are realizing, that indeed the sales position of most hide suppliers is decent and there is little hope, that unsold hides are accumulating in the short term what could develop some pressure on the market and prices in the short term. Quite reverse decent interest for hides was seen and the loads which were still on offer where snapped quickly up and found homes without too much arguing if one was willing to be satisfied              

with moderate prices increases. Tanners still need to cover some production holes until the summer vacation and most seemed to be happy just to bring the season to an end to analyze over the summer how things are going to develop in the second half of the year. There is a general consensus, that leather prices will not advance to cover the increased cost of production and raw material and in some grades and here in particular on small skins alternatives such as goat and hairsheep leathers were displayed to escape from the limited supply and prices for adequate raw materials such as calf and veals. How successful this is going to be is depending how the manufacturers are going to respond. This will still need some weeks until a clear picture can be given. For heavier side leathers and upholstery same applies. Quality tanners are happy, that they are mostly followed by their regular suppliers who in most cases also try to stick what they know instead of going test new adventures in their customers list. It might have been possible to squeeze a bit more out of new customers, but in general most customer/supplier relations are not put at risk for a few cents more. This also clearly displays, that the majority of the trade is

realizing the rising tensions in the market which are also related to the external facts such as further rising prices for energy, chemical, interest etc. which eventually might not fail to have an impact on the global economy. Sales where a bit across the board and in our case the hides reserved for the regular customers found their homes. Incementally higher prices vs. some weeks ago were achieved in the European customer base while overeas calculations were burdened by the falling value of the USD. The kill: . The kill is further declining and is in particular reduced by the short weeks which we now see for the near future. Several four day weeks are ahead of us and the numbers will be affected also by the seasonal decline of volume and weights. Bottlenecks in fresh hide supplies have consequently to be expected.What do we expect: There is no change in the trend of the firm side of steady. Since there are not many more hides to sell it is not easy to test how far this market can be still pushed. At the end however, it seems also, that buyers and sellers would be quite happy to see a stable market now with not too much movement anymore in the short term. An extended weaker trend of the USD would certainly take some of the speed out of the EU market.