What happened this week: There seems hardly to change anything at the moment. In the key grades anything what is offered out – and this is little – is snapped up by the market right away. Impressive was the fact, that even Asian buyers where willing to buy and not to wait until the Hongkong Show next week or for the visits which are due over the next ten to fourteen days. Whatever the interpretation for the reasons is, but one thing is obvious they are still in need of raw material supply. The question to be answered for us is just why the interest is on European hides. Most likely, because they are today one of the cheapest buy after the steep rise in Brazilian hides lately. Unfortumately the USD was on a rollercoaster ride this week and has been at the end rather won than up and this has taken a bit away from the good chances. However, the Chinese buyers have at least not been favoured buy cheap offers this week buy the travellers from around the world in the country, otherwise they would have kept their feet quiet. Since there is not much to offer unfortunately the test cant be made what would happen if the offer list would be much more extended. What can be said about the positive tone in the Orient one can

on the negative side for Europe as well. It seems, that the European tanning industry – mainly the upholstery section – is in another round of restructuring and loosing further ground globally – certainly also thanks to the weaker USD which is almost 8 % down against the first quarter of 2006. More and more finished leather and products from South America and Asia is flooding into Europe and is taking further home market potential away from the local industry – not to speak about the problems in the Export markets anyway. So, if the fundamentals are not going to change quickly the a further shrinkage of the production capacity in Europe seems to be inevitable. Meantime European tanners tried this week to take their chance in the market of heavy and expensive hides. Knowing, that this is still a field where their competition from the Orient is limited they where aggressively testing how far their influence is still reaching. In their attempt to get raw material prices back to their desired levels they were not shy to bid low to see how desperate sellers were. We don’t believe, that despite the recent difficulties in extra heavy cows and bulls sellers were willing to take what was offered, but it is

going to be exciting to see how this local battle is going to end. Well, it has not much to do with the international general campus, but could mean at least something for domestic situation. In the meantime it seems also that the struggle has a bit shifted away from the bulls and more to the extra heavy cows. Prices in general were almost steady in figures, but due to the weaker USD and the slow performance of the European market revenues have been shaved incrementally. The kill: Easter is starting to throw its shadows and the kill remains steady on the low levels. Nevertheless the weeks after next will be shortened by a day and this is going to miss in the slaughter and after that we are going anyway into the low season of spring and summer. What do we expect: Next week all eyes will focus on the APLF and being there or not everybody is going to try to figure out the next move of the market which will entirely depend on the impression on leather sales and prices concluded and the retail budgets which may become available  during the gathering in the Far East . With the present balance of the market it is unlikely, that too much is going to happen with prices except the uncertain outlook for the European specialities in heavies.