Market report 05.08.2022
Osterhorn, Friday, 05.08.2022
The US $ in EURO 1,0160
What happened this week
Now they are finally here, the big summer holidays. At least for most of us who live and work here in Europe. But also in other countries in the northern hemisphere one has the feeling that wherever possible a break is being taken. It is probably also the best thing to do at the moment, in a time that presents so many challenges. The increasing political uncertainty with its consequences for the global economy simply makes it necessary to think about how business will progress in the coming months. At the moment, forecasts and assessments have more the quality of a lottery and lack a secure and reliable factual basis. Sudden events can throw everything overboard again within a very short time. Given the holiday season, activity in our market is also very limited. Little business always means plenty of opportunity for opinions, political manouvres and interest strategies and this August doesn’t make much difference. Opinions and views on market developments could hardly be more different between many players. On the facts, very little has changed in our market. The kill is low and cause corresponding under-utilisation in many processing units. Some are trying to react to this with appropriate capacity adjustments, others are looking for salvation in the expansion of their supplier base and are prepared to accept very high costs and very long distances for this. On the sales
side, European buyers have now almost completely left the market and there are no decisive impulses coming from Asia either, indicating that the leather industry, especially in China, is really expecting very substantial leather business in the coming months. Consequently, this still means that despite the reduced beef production in Europe and other regions, it does not appear that the leather industry is currently undersupplied with raw material. It is actually also completely irrelevant how the situation looks in the middle of the summer. What is more important is how the balance will be in the remaining months of the year or even in the entire winter half-year. Business-wise, there is really very little to report at the moment. In Europe, activity has almost come to a complete standstill and only very isolated, random deals for special items could still be concluded. Mostly these are lighter weights. In China, interest in cow hides continues to be seen, but only at the prices that the customers have in mind. The bottom line is that this left us with very few opportunities to think about or even close sales.