This week: The majority of the EU countries have returned to lockdown. This has not hit industrial production much because these would have been shut anyway. It did not, initially, influence students either, because they would have been on holiday anyway. But it did affect the traditional Christmas of many families. 

Vaccination programmes are beginning and we have learned that vaccination is a way out of the pandemic, but a long one. Politicians and media are beginning to prepare people for full lockdown across Europe. It seems clear that regaining control of the pandemic will require cases to be reduced to a much lower level. This may prove almost impossible with only national decisions rather than coordinated ones. With the numbers of infections rising almost everywhere it might be time to do this.

This would certainly also have a great impact on our business. The hide and leather business has run in the past weeks pretty much according to the pattern one would expect for the holiday period. European clients were busy winding down and had their purchasing books almost completely closed. Asia was still shopping around. Some grades are always bought, obviously for strategic reasons.

Timely shipping is a challenge in many parts of the world. Quality issues are too, as is the uncertainty of the kill. This might trigger tanners in Asia to buy hides a bit above their real needs, just to be on the safe side. It is only a theory, but it is based on some good reasons and should probably be watched. We all know how buyers react when they are no longer in desperate need of hides.

We have a lot of questions ahead of us: production interruptions around Chinese New Year, shipping and currency, the next steps around the pandemic in the Western world and the economy in the long term.

One should at least recognise the drop in car sales in the EU in November. It would be negligent to believe we have already passed all the problems and that demand for hides is on safe ground. The ambition of the beef industry to believe in a sustained bull market trend is certainly not a given fact.

It is clear that buyers have been looking for substitutes for US hides. In regard to prices, sales to Asia are not the big-price ticket. Prices in US dollars look good compared to the summer, but the net return still does not match European levels and are not really attractive. 

The kill: Numbers have been reasonable. The forecast for the coming weeks are subdued, with several plants advising reduced slaughter days over and above the holidays.

What we expect: It is time again to wish all our readers and business friends a better year in 2021.

Share this story: