Another rather uneventful week is coming to an end. This is of course due in particular to the holiday season in China, or rather the whole of Asia. The start of the Olympic Games this Friday also plays a weighty role, as the Chinese government is doing everything it can, despite the adverse circumstances, to ensure that the event is used as one of the major events to showcase the country. Under these conditions, it was not surprising that communication with China reached almost zero this week. Without actively asking for answers or demanding information, customers in Asia were obviously very happy not to have to worry about business or perhaps better said not to have to buy raw material this week unless it was the bargain of the year. In addition, of course, the fact still remains that the European hides currently seem relatively expensive by international standards. If we add to this the volumes that the Chinese in particular were still buying in America before the Chinese New Year, it is not surprising that there is probably no immediate need for additional purchases at the moment. This leads us to the situation in Europe, which then this week shows itself to be once again extremely difficult with regard to purchasing and the new prices at the slaughterhouses for the month of February. Obviously, the slaughter industry thinks that the relatively low kill, despite not unusual for the season, offer an opportunity to improve their overall difficult calculation through higher returns for the hides. Thus, demands were made that could in no way be reconciled with the real market conditions. Again, one is betting on the automotive leather tanners, who one assumes will be forced to accept any price increase because of the lower kill, for the continuity of supply. The next two weeks will show whether this is actually the case and whether and to what extent

the tanners are actually prepared to follow these demands. However, one should perhaps also remember last year, whensimilar situations also occurred twice and the consequences are well known to everyone. The relationship between the slaughter and leather industry and themiddlemen has always had its own DNA and this does not seem to change. The individual transaction counts more than a predictable and secure consistency.As a result of the widely diverging price expectations, business in Europe was initially severely paralysed. There are always some who declare individualtransactions to be the general market, but that does not make it reality. The political and macroeconomic environment is also not ideal for too muchexperimentation and the stronger EURO does not help either. Unfortunately, it is always difficult when very extreme positions are taken early on and then asustainable basis for the business is to be found. This week’s sales were thus limited to individual random trades and the larger negotiations were postponedfor the time being due to the circumstances.

The kill

This week’s productions stabilised at the low but usual level for February. The share of male goods is indeed very low and the situation on the food market does not give the impression that people have already become fully accustomed to the significantly higher prices. Still cannot see what could change in this situation in the next few weeks.

What do we expect

The next few weeks will certainly bring big problems. The slaughter industry’s idea of getting significantly higher prices for the by-product will certainly meet with very strong resistance. It will certainly not be possible to implement significantly higher prices on the global markets in the short term, and we, at least, consider it highly unlikely that the leather industry in Europe will have to pay significantly higher prices due to such a great shortage of supplies, which would severely shake the credibility of the buyers. However, as is so often the case, the outcome is open.