This week: It is not often that the hide market is affected by global events. However, the ongoing war in Ukraine, the resulting price increases and the spread of the coronavirus in China are, in our opinion, leaving deep scars. This is perhaps why the APLF trade fair in Dubai (March 30-April 1) came at the right time.

The fair in Dubai can by no means compete with the fair in Hong Kong, but it was nevertheless an opportunity to have real face-to-face conversations again after a long time. Among the exhibitors, the large pavilions of various countries, including India, Pakistan, France, Italy and Brazil, were dominant. From the rest of the world, there were a few other exhibitors testing the location, or, perhaps, expecting possible new contacts from visitors from the region.

Among the visitors from the raw materials sector, it was particularly noticeable that the average age was relatively high. To put it another way, the hard-core ‘old school’ representatives are always there and don’t let anything cause them to miss out on any potential opportunity. But those who stayed at home didn’t miss out on any big deals. Possibly, however, this was a good opportunity to meet and exchange ideas with old and new representatives of the leather industry supply chain. Certainly only a few were disappointed, even if it only served to confirm possible preconceived ideas.

One can literally feel the struggle everywhere to make the right assessments and decisions for the coming months. It has certainly not happened very often that the conditions for the coming seasons were as different as they are now from  the current cycle coming to an end. There is no doubt that opinions still diverge quite widely. There is no getting around the fact that many opinions are not based on the facts, but essentially arise from one’s own problems, emotions and the necessary hopes that result from them. Those who want to see it positively, see leather having new market opportunities owing to the increased price for alternative materials. Those who want to see it negatively fear that inflation and the general political uncertainty will weigh heavily on the market opportunities for leather and the products made from it.

On the business side, we honestly have very little to report. The lockdown situation in China is weighing heavily and we have not seen any serious interest in goods from this big market in recent days. In Europe, where sales tend to be concentrated on fixed programmes and time periods, there is not much to discuss at the moment either; there was not even the usual random business last week. Thus – due to a lack of sales activity – there are also no real price changes to report and everyone may draw their own conclusions.

The kill: There is also nothing really new to report about beef production. The kill is stable, not falling any further and, thus, stagnating at a low level. At the moment there is really no indication of what could change this situation, at least until Easter.

What we expect: As is so often the case in such times, there are always players who put quantity above everything. History repeats itself. Highly invested processors of hides are mercilessly quantity-dependent and the longer the low slaughter lasts, the more driven they are to somehow achieve the highest quantity possible, regardless of economics and with no consideration of the general market situation. This is preventing prices in our region from correcting appropriately at the moment, which would certainly be quite sensible in terms of risk minimisation. With regard to sales prices, it may still take a few weeks until reality bites, but we remain very sceptical when looking at the current overall situation. It seems to us to be less a question of if, and more a question of when the corrections will come.

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