| What
happened this week: We
have been in a phase for some time now
in which it is extremely difficult to
provide a truly reliable and accurate
reflection of the market and prices.
From
a purely theoretical and analytical
point of view, the situation is
relatively
clear. The only problem is that this is
not reflected in regular price reports.
In the absence of sufficiently reliable
transactions and, above all, sufficient
volume, the reports and the price
reports have not been a marital
reflection of
the respective current market for some
time. Since mid-September at the latest,
at least in Europe, there are almost
only deals based on the regular delivery
programmes for fresh produce. Since
these usually run for at least four
weeks,
there is no real new price development
for a long time and the price of the
past keeps its current value until there
is a new one. Of course, this distorts
the real situation not insignificantly.
This is also due to the lack of active
exports to Asia. When there are enough
goods on the market, the export business
is active, then there are indeed new
prices several times a week and a
dynamic
market with correspondingdevelopment
Consequently, this means for the current
situation that both the reports - and
this also applies to ours - as well as
the price quotations have no real
relation to the current market
situation.
This is regretted, but there are no
great alternatives. No trade, no price
and
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individual random sales can
not be used as a reference for the
general market
situation. So in
these times everyone paints his own
picture as he needs to, or as he likes
to.
Regrettably, from a sober point of view,
we currently have more of a demand
problem than a real price problem. In
particular, the considerably reduced
purchases by the automotive industry are
putting a strain on production in the
supply chain. Too little leather is
being called off, and presently that has
nothing to do with the amount of demand
or the prices. While the mood in the
other sectors was still very positive
until mid-September, there is now a lack
of orders to confirm this. The reasons
are many, but the leather industry is
disappointed. This is all the worse
because we are now in the period in
which
the greatest production activity is
normally started. Consequently, this
means that
the material flow in the supply chain
has slowed down considerably since a few
weeks. In addition, prices in other
regions have already fallen
significantly,
which does not exactly support the
competitiveness of the European hides.
Business this week has been
correspondingly slow. There are no new
prices yet,
individual sales in Asia cannot be
consideredrepresentative and everyone is
now waiting with bated breath for the
next abattoir negotiations at the
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beginning
of November. Effective business this
week was again concentrated either
on
coincidences or on a wide variety of
niche items that do not represent a
market
reference.
The
Kill: The kill fell back a
little this week. The
extremely high purchase prices for
livestock, production problems in
the
slaughterhouses and sluggish
business in the food retail sector
weighed on the
situation. There is hardly any way
out of this vicious circle for the
time
being and so perhaps only the change
in the weather in the last few days
can
bring a little more dynamism.
What
do we expect:
For the moment, we do not know what
could
stop the price pressure in the
coming weeks. In our view, the main
problem is
that many European hides are
currently not competitive in terms
of price, and
this at a time when production in
China is already burdened by energy
shortages
and logistical problems. Once again,
we have failed to adapt to the
market
realities in time and this must then
always be made up for with the
corresponding delay. We still enjoy
the privilege of quality in Europe,
so if
we are realistic in our pricing,
then there will be considerably
fewer
problems.
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