What happened this week:. With the Shanghai Fair the summer season traditionally ends and the trade gets the opportunity to set their watches for the business outlook and the prospects for the rest of the year. The show was well attended and hardly anyone was missing one had expected to come. It was the expected event with little emotion and busy schedules – at least the first two days and eventually it delivered quite clear and better indications about the market than we had expected, although not all were agreeing about their opinions. As far as our findings go the main results were, that leather business in general remains quite steady on the high levels we have reached over the past year. However, the situation seems not to be the same for everyone tanner or better said for every sector. While handbag and accessory leather producers were far the busiest and may have been happiest during the show others such as upholstery and also shoe leather are facing an increasing number of problems. They main issue is, that the demand in numbers of units is certainly not down, but the price structure of the products is changing or better said further declining. Consequently is is the demand for low price 

raw material still growing and outpacing the offer. Some go already that far to talk about the shortage. On the other side of the coin is demand for medium and higher price raw material declining and was already reflected in the growing price pressure on the medium to higher priced categories such as heifers and steers from Europe and America . This was also seen in the fair and was probably one of the main results one could draw from the vent. For us this meant good demand for low grades and steady demand for dairy cows while interest for bulls was pretty much limited and chances to place some of the lighter weights were extremely limited. It seemed also, that some of our European colleges had come to Asia with a reasonable amount of hides to sell after the summer and at least as far males were concerned their success was limited. As far as prices were concerned dairy cow prices were steady or even fractionally higher what was unfortunately absorbed by the extended fall of the USD against the EURO. With the little interest for males it is anybodies guess were the real price level is for the time being and buyers and sellers ideas couldn’t be drifting further apart. So, individual reasons may be

the logic behind various statements. Economical news from the US are continuing to shake the financial markets and add to the general uncertainty of the market and increasing the pressure on the standard products in the middle price segment in Europe and the USA and it has to be seen for how long the growth in the emerging markets can still compensate for the mounting pressure in the old economies. A further weakening USD is going to add to the confusion.The kill: As expected did the kill rise further. The slow season is behind us and number should stay at least stable in the weeks to come. While the weights for males are normal already are females lagging a bit behind with their averages. What do we expect: It is difficult to find a general statement for the market. The situation looks pretty much unsettled for the future with cows having presently a much easier time than their male counterparts. Without the high level of general uncertainty the situation would not be unusual for beginning of September as the market normally sorts itself out only in October when productions are back in full swing. For the next week the cow market will be USD related, while we notice extending pressure on the prices for bulls with price adjustments likely.