German Perspective - 26.07.16
26/07/2016
With the tight money situation many Chinese tanners are facing at the moment it is becoming an obstacle to competition with other origins supplying the same destination. This is making European hides fall in the preference list of raw material options at the moment. Also many European suppliers are taking their vacations now and despite the fact that they cannot really close down because hides are coming in every day office staff is reduced and the kill is pretty low too.
Those who are still at their desks are trying to figure out what to think about leather demand and the situation for the rest of the year. Is leather demand really as bad as many try to make out or is it as good as many people hope for? From our perspective the answer for a long time bas been a bit of both. Some sectors of the leather business are doing quite well and have barely suffered in demand since we began to see a global downturn in leather consumption. Other sectors, and by this we mean the mass production and commodity part of the business, have to accept that the amount of leather used in production is definitely less and many regions around the globe are not performing that well in terms of consumer demand.
On top of this we are facing insecurity owing to shootings and terrorist attacks, which are keeping tourists away; this may even lead to a more pronounced shift into internet business.It might also reduce the spontaneous purchases of street shoppers. Anyway, at the moment we have quite a number of potential negative effects on consumer spending.
Business activity and sales this week were consequently rather patchy again. Business is never zero, but we are missing any serious interest in lighter-weight males at the moment. Also heifers, which do not look particularly expensive, are finding less interest from Asia than one would expect at this time of the year. Prices achieved were a fraction lower in US dollar terms but this was mostly compensated by the moderate increase in currency exchange rates, which happened in the second half of last week.
The kill: The kill continues to be very low and it is very difficult to make any kind of comparison. We are now in the peak holiday period and that means beef consumption is at the lowest level. The kill of males is almost negligible because the better cuts are difficult to sell. The kill of cows is reasonably normal and adequate and we are still waiting for the final effects of the low milk prices and the attempts of governments to reduce milk supply.
What we expect: Heavy hides will hold up owing to low supply, but for the rest we will be happy if prices hold steady.
Type
| Weight range | Avg. green weight | Salted weight | Avg. weight salted | Price per kg green weight | Trend | |
| Ox/heifers | 15/24,5 kg | 22,0/23,5 kg | 13/22 kg | 20/21 kg | € 2,30 |
Weak |
| 25/29,5 kg | 27,5/28,5 kg | 22/27 kg | 25/26 kg | € 1.80 |
Weak |
|
|
Dairy cows |
15/24,5 kg |
22,5/23,5 kg |
13/22 kg |
20/21 kg |
€ 1.70 |
Weak |
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 1,45 |
Weakish | |
|
30/+ kg |
33,5/35,5 kg |
27/+ kg |
29/31 kg |
€ 1,40 |
Weakish | |
| Bulls | 25/29,5 kg | 27,5/28,5 kg | 22/ 27 kg | 25/26 kg | € 1,90 |
Weak |
| 30/39,5 kg | 36,0/37,0 kg | 24/34 kg | 31/33 kg | € 1.90 |
Weakish |
|
| 40/+ kg | 45,0/48,0 kg | 34/+ kg | 38/40 kg | € 1.85 |
Steady |
|
| Thirds | 15/+ kg | 25,0/27,5 kg | 13/+ kg | 24/26 kg | € 1,30 |
Weakish |
| Thirds bulls | 30/+ kg | 38,0/40,0 kg | 24/+ kg | 33/36 kg | € 1.30 |
Steady |
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