Market report | 21.01.2022

All in all, a rather uneventful week comes to an end. While the week before everybody was still talking about the big sales in America and everyone was making up their own opinion about the market from this, was in Europe the attention almost exclusively focused on the lower slaughter numbers at the beginning of the year.  The enthusiasm fell further and further as the week progressed. In Asia, the start of the Chinese New Year holiday season was clearly noticeable. Much more noticeable than in recent years. It is very difficult to say whether this is due to the New Year or possibly also the Olympic Games that are about to begin, or whether the additional lock-downs may even be playing a role. The only thing that is obvious is that people in China are probably quite happy to have two weeks of peace and quiet ahead of them and to concentrate on their families. The number of e-mails and contacts from China decreased rapidly from the middle of the week. In Europe, once again a very difficult constellation is developing for the market. Of course it is true that the kill is lower in January and probably also in the coming weeks. This is neither surprising nor can the current figures be understood as particularly low. The last livestock census also showed that livestock numbers in Germany have only fallen very slightly, and that allows only one conclusion, namely that no significant slumps in meat production and the kill are to be expected this year either. Of course, the pandemic also plays a decisive role now. Due to the rapid increase in infections, many companies, including slaughterhouses, are affected by production reductions or even interruptions.

The same applies to tanneries, of course, and so the direct influence actually balances out as far as possible. Of course, the slaughter industry is trying to use this situation to raise the prices for hides again. On the one hand, this is of course understandable, but on the other hand, sooner or later the problem arises that German hides may now become far too expensive by international standards. This situation should be avoided as much as possible, at least as long as it is not clear how leather demand will develop over the rest of the year. At the moment, one has to deal with moderately increased prices and it is to be hoped that political and strategic games will not gain too much influence on pricing in the coming months. Sales this week were limited to renewals of regular programmes in Europe. There were very few offers to Asia and this seemed to fit quite well with the reduced interest. The new deals showed very moderate price premiums in the range of 2% to 4% maximum.

The kill

Slaughterings returned to normal during the week and are now back to normal levels for this time of year. Meat prices continue to rise and food retailers and consumers still have to get used to the new levels. We do not expect any significant change in volumes next week either.

What do we expect

Anything other than a quiet week would be a big surprise. China is celebrating its New Year and we do not have the impression that there is much momentum in the market apart from business routines and deals in Europe.

All in all, a rather uneventful week comes to an end. While the week before everybody was still talking about the big sales in America and everyone was making up their own opinion about the market from this, was in Europe the attention almost exclusively focused on the lower slaughter numbers at the beginning of the year.  The enthusiasm fell further and further as the week progressed. In Asia, the start of the Chinese New Year holiday season was clearly noticeable. Much more noticeable than in recent years. It is very difficult to say whether this is due to the New Year or possibly also the Olympic Games that are about to begin, or whether the additional lock-downs may even be playing a role. The only thing that is obvious is that people in China are probably quite happy to have two weeks of peace and quiet ahead of them and to concentrate on their families. The number of e-mails and contacts from China decreased rapidly from the middle of the week. In Europe, once again a very difficult constellation is developing for the market. Of course it is true that the kill is lower in January and probably also in the coming weeks. This is neither surprising nor can the current figures be understood as particularly low. The last livestock census also showed that livestock numbers in Germany have only fallen very slightly, and that allows only one conclusion, namely that no significant slumps in meat production and the kill are to be expected this year either. Of course, the pandemic also plays a decisive role now. Due to the rapid increase in infections, many companies, including slaughterhouses, are affected by production reductions or even interruptions.

The same applies to tanneries, of course, and so the direct influence actually balances out as far as possible. Of course, the slaughter industry is trying to use this situation to raise the prices for hides again. On the one hand, this is of course understandable, but on the other hand, sooner or later the problem arises that German hides may now become far too expensive by international standards. This situation should be avoided as much as possible, at least as long as it is not clear how leather demand will develop over the rest of the year. At the moment, one has to deal with moderately increased prices and it is to be hoped that political and strategic games will not gain too much influence on pricing in the coming months. Sales this week were limited to renewals of regular programmes in Europe. There were very few offers to Asia and this seemed to fit quite well with the reduced interest. The new deals showed very moderate price premiums in the range of 2% to 4% maximum.

The kill

Slaughterings returned to normal during the week and are now back to normal levels for this time of year. Meat prices continue to rise and food retailers and consumers still have to get used to the new levels. We do not expect any significant change in volumes next week either.

What do we expect

Anything other than a quiet week would be a big surprise. China is celebrating its New Year and we do not have the impression that there is much momentum in the market apart from business routines and deals in Europe.

All in all, a rather uneventful week comes to an end. While the week before everybody was still talking about the big sales in America and everyone was making up their own opinion about the market from this, was in Europe the attention almost exclusively focused on the lower slaughter numbers at the beginning of the year.  The enthusiasm fell further and further as the week progressed. In Asia, the start of the Chinese New Year holiday season was clearly noticeable. Much more noticeable than in recent years. It is very difficult to say whether this is due to the New Year or possibly also the Olympic Games that are about to begin, or whether the additional lock-downs may even be playing a role. The only thing that is obvious is that people in China are probably quite happy to have two weeks of peace and quiet ahead of them and to concentrate on their families. The number of e-mails and contacts from China decreased rapidly from the middle of the week. In Europe, once again a very difficult constellation is developing for the market. Of course it is true that the kill is lower in January and probably also in the coming weeks. This is neither surprising nor can the current figures be understood as particularly low. The last livestock census also showed that livestock numbers in Germany have only fallen very slightly, and that allows only one conclusion, namely that no significant slumps in meat production and the kill are to be expected this year either. Of course, the pandemic also plays a decisive role now. Due to the rapid increase in infections, many companies, including slaughterhouses, are affected by production reductions or even interruptions.

The same applies to tanneries, of course, and so the direct influence actually balances out as far as possible. Of course, the slaughter industry is trying to use this situation to raise the prices for hides again. On the one hand, this is of course understandable, but on the other hand, sooner or later the problem arises that German hides may now become far too expensive by international standards. This situation should be avoided as much as possible, at least as long as it is not clear how leather demand will develop over the rest of the year. At the moment, one has to deal with moderately increased prices and it is to be hoped that political and strategic games will not gain too much influence on pricing in the coming months. Sales this week were limited to renewals of regular programmes in Europe. There were very few offers to Asia and this seemed to fit quite well with the reduced interest. The new deals showed very moderate price premiums in the range of 2% to 4% maximum.

The kill

Slaughterings returned to normal during the week and are now back to normal levels for this time of year. Meat prices continue to rise and food retailers and consumers still have to get used to the new levels. We do not expect any significant change in volumes next week either.

What do we expect

Anything other than a quiet week would be a big surprise. China is celebrating its New Year and we do not have the impression that there is much momentum in the market apart from business routines and deals in Europe.