This week: It is difficult to write anything sensible about our market in these times. The hopes that probably everyone had at the end of February that any invasion of Ukraine would only be a short-term nightmare had evaporated a week later.

There are no signs at all of de-escalation. On the contrary, the risk of conflict spreading remains high. Of course, it always takes a few days for systems to adapt to changed situations and, because conditions are changing almost daily, it is hardly possible to react quickly in long supply chains.

However, two things can already be determined with certainty. Firstly, for many companies, sales and revenues in Russia and Ukraine will be lost for a long period of time. Secondly, many companies and the markets lack raw material and component supplies. Both are certain to have a negative impact on business activities in Europe in the near future. 

Attempts to analyse the situation with a certain calmness and to to try to reassure customers and suppliers are understandable. Nevertheless, this does not change the realities for the coming months. However, it is also true that ignorance and uncertainty lead to speculation and unfounded assumptions.

At the moment we see massively increased energy costs and falls in the value of the euro, in addition to sales and procurement problems. It should also be borne in mind that even a quick end to the war would hardly lead to an equally quick end to the sanctions. In short, the world in Europe will look very different for some time to come than it did 10 days ago, and it will certainly not be more consumer-friendly.

Business this week was affected by the events. Basically, activity decreased from day to day, although, fortunately, most of the deals for the next few weeks had already been done. We also received very little interest from Asia. The war has obviously – and this is more than understandable – put everyone in a wait-and-see position for the time being. In any case, it can be said that there were no panic reactions in which either current contracts were cancelled or additional raw material was frantically secured. Our sales this week are thus almost exclusively limited to small volumes for the various niche markets and niche products within Europe.

The kill: We continue to move at stable, low levels, which is not unusual for this time of year. However, the situation is becoming more and more complicated here as well because the increase in prices for live cattle is making it more difficult every day for the slaughterhouses to calculate. Resistance from food retailers to higher prices is strong and higher levels are not easy to push through to consumers.

What we expect: The slaughter industry and the leather industry each paint a completely different picture with regard to the impact of the war in Ukraine in the commodity markets. We still think it is premature to make forecasts, but in principle we believe that the risks of a decline in demand clearly outweigh the risks of shortage, at least in Europe.

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