What happened this week: The hide market - or better business - is not a real challenge at the moment. Most of the sales activity is related to discussions with the regular clients about their needs and to do the utmost and best to keep them securely and consistently supplied. Since there are hardly any security stocks left most of the just-in-time deliveries have to be handled from current kill and production. This is a real challenge as the kill and the composition of the grades is delivering weekly surprises. Despite all concerns about the market,  there is still enough fundamental  need to clean up what is put on offer at the moment. Still no hide offered remains unsold. Anyway, apart from this positive statement everyone can sense easily, that European tanners are just buying what they still desperately need to get into their holidays, but not a single hide more. The content of the dialog with the tanners is today also just related to the fact that their faith in getting sufficient increases in leather prices in the near future is pretty limited. Well, this would also a bit too much expected to hope for the admission for higher raw material prices. Anyway, on one side we see less trading activity

now for several weeks, while on the other side any interest shown on offers made ended in a sale. When it comes to prices things are not that easy. While abattoir prices are rising incrementally for the last months already were returns not moving with the same dynamic. Finally with the falling average weights and margins shrinking it needed a much stiffer presentation vs. the clients this time to fight for an adequate selling price. While in Asia the higher prices from other overseas origins were helping to get a lift were discussions in Europe like pulling teeth. Tanners repeated stubbornly their margin problems to justify their unwillingness to add a few cents to the previous prices. And as usual  the compromises found did not satisfy anyone. Tanners can not convert the higher raw material cost into higher leather prices and complain in addition about deteriorating selections while suppliers suffer as well from falling avg. weights and shrinking margins due to insufficient selling prices. Nothing unusual in such a market. Just unusual, because many players have already forgotten, that this is sometimes nothing uncommon in the leather pipeline. It does, however not help anyone at present

and so the best would be to get quickly into the summer holiday period to get a bit of relief from the stressed flow of product. Interesting is also going to see if the Football World Cup is going to have any kind of influence on the leather business and market activity. Depending on the time zone a number of people will spend some time during office and production hours in front of the TV and the daily interest will  shift its focus a bit. Its only a week away. The kill: A bit awkward at the moment. Due to the numerous holidays one can not have a clear picture, but the kill is shifting quickly between males and females and in aggregate is better than one would expect. May be this is related to the upcoming World Cup with more tourists, that retailers and restaurants are getting more optimistic about beef consumption. Next week is short again and the total weekly numbers will consequently not improve. What do we expect: The market remains on a solid and firm footing. This seems not to change until the holiday season. At the same time tanner demand is now slowing declining as well as the USD  value what is naturally limiting the market. So, all remains in the hands of the Asian buyers, but we still believe in a steady market with further falling activity.