A rather strange week is coming to an end. On the one hand, the war in Ukraine continues unabated. The brutality and aggression of the Russian invaders is rather increasing. The courage and strength of the Ukrainian resistance is admirable. The situation affected our market for cattle hides in a very fragmented and individual. The standstill of the tanneries in Ukraine and the almost completely blocked supply route led to a rapid supply gap in the articles used in Italy from Ukraine in particular. The light hide sector is the most affected, especially semi-finished products. It is quite clear that no matter what happens, this supply can neither be compensated in the short term nor resumed in the foreseeable future. This meant that many buyers had to find adequate replacements at short notice, and that is not so easy with these particular skin types. So, where similar or equivalent goods were available, selling at asking prices was possible relatively quickly. It is just that in our production only very few goods are really suitable for this. Beyond that, the situation was clearly different. The slaughter industry is still trying to convert the admittedly lower kill and the considerably higher prices for live cattle into higher prices also for by-products, but this is proving very difficult due to the general uncertainty and situation and the fact that there is no correlation between the beef and the hide market. Sales of heavy bulls are also not as easy as one would expect due to the lower production and resistance to higher prices from the leather industry remains very high. For the other standard types such as cows and heifers, the situation was by no means better. The reluctance from the leather industry is increasing day by day – and this cannot surprise anyone. They take what they need from regular and reliable suppliers, but not more than that. On top of that, we are not really

attractive and competitive with prices in continental Europe at the moment. Due to the rising Corona numbers in China and the resulting disruptions in transport and production, the reluctance of customers from there has also increased. It was already not really an active sales market in the last few weeks, but in the meantime, although many offers and information are requested, in the end quite little – if anything at all – is bought. There is simply too much uncertainty in China at the moment about how the economic situation will develop and especially how the government will react to the pandemic in the future. All experience shows that uncertainty in China is one of the biggest poisons for business and demand. As there is also no immediate sales pressure due to the low slaughter, sales were not particularly extensive this week either. Deals with regular and still normally producing customers in Europe were possible and price changes were very small. Mostly it was really just a matter of minor political adjustments to prices, to the previous deals from February, rather than any real discussions about price levels. Overall, the consensus among the very close customer relationships was that major price changes in March make little sense given the considerable uncertainties. At the same time, however, this means that major adjustments may be necessary in the next negotiations if there are decisive changes in the basic factors and, as we all know, that can happen any day now.

The kill

Livestock prices remain high and are more likely to rise. The kill fluctuates strongly from day to day, but overall it is still quite low and at the lower end of expectations. As far as we know, nothing will change in the next week.