Market report 17.06.2022


Osterhorn, Friday, 17.06.2022
The US $ in EURO 1,0490

What happened this week

Another week has ended and nothing significant has changed. Trading drags along, trading from Friday to Friday without any real decisive changes or improvements. We are only in mid-June and thus the entire summer is still ahead of us. The problem remains demand and price, although for Europeans the problem is really only price. With the quality of the raw material we have, we would actually always be able to sell the entire production and thus get through the year without major problems. Once again, we have made the mistake of reacting too late and too little to the developing problems. This is playing the same game as always, downplaying the problems and hoping for the miracle that will solve the problems in the end. For the moment, however, the problems remain the same – essentially that prices at the slaughterhouses are still reacting too little and too late to the decline on the world markets. Of course, this never affects the entire production, but quite a number of hides remain unsold and thus hang like the famous sword of Damocles over the heads of the market. Even if the drums of the beamhouses of the leather industry still have to be filled until the summer holidays, on the other hand, the obvious stocks in semi-finished goods must give one cause for concern. Only a significant increase in leather demand can eventually clear this famous logjam in the production chain. In order to market the accumulating hides by that time, which is really unknown, price levels must finally be reached that are not limited to 70% of the quantity, but take the entire 100% into account in their synthesis. In the course of this week, interest in our region focused more on the conclusion of prices at the slaughterhouses than on the price level in sales. One

thing can be said at this point: The adjustments that are being talked about and that have already been concluded in part are once again far from sufficient to deal with the current problem. In sales, there was definitely interest from many regions, but as a rule the bids offered were too low or the price lists were ignored straight away. Only individual hide types and here the lighter weights for heifers stood out were there very broad interest and this is certainly due to the still very high prices for calfskins. Consequently, sales volumes were again below the usual average, although this is likely to be offset somewhat by the usual closings of the regular programmes in the coming weeks. With the exception of a few niches, the price trend continues to point downwards, although the pressure has eased after the significant discounts on cows in recent weeks and, in our estimation, the path to a secure price level for male goods has not yet been completed. The main problem over the summer will certainly be sufficient shipments in volume, which is threatened by an almost complete production standstill in Europe from the end of July and therefore the Asian buyers for shipments would currently be the only delivery alternative. In order to carry out these shipments and book the necessary shipping space, however, sales would be necessary in the next few weeks.

The kill