This week: There are still some sales and turnover every week, but what is generally referred to as a market doesn’t really exist at the moment. The activities and the number of players on the market and the volumes are simply too small.

The main problem remains Europe, because the total demand for leather here has been too small for a long time. The value chains, which require a consumer with both a sufficient budget and an awareness of quality, have shrunk in every respect. Volumes are lower, but the cost of production continues to rise.

To compound the whole problem, the entire supply chain is struggling with bureaucracy, some of which is self-inflicted, but also owe much to the bureaucracies in the various European countries. A reversal of this trend cannot be seen anywhere at the moment and this is also robbing the leather industry of more energy and creativity every day. Looking at federal law, we are working more and more as though it were for a public authority. Of course, there may be many explanations, justifications and excuses for this, but there are no solutions. The constraints imposed on the entire leather industry are simply not suited to the raw material and the product and have been having a paralysing effect for some time.

This may be manageable for the cost leaders overseas, but for the industry in Europe, which has to be flexible, fast and creative so as to be able to pass on the increased costs, it is poison. While many may not want to admit it, this is a real threat that we all face. 

To add a positive note, the retail trade has been very lucky with the early onset of winter. Winter shoes, gloves and, in some cases, doubleface jackets are selling extremely well at the moment and are at least helping to reduce the large stocks of previous years. This is good news for the beleaguered retail sector.

Business this week was again almost exclusively focused on customers in Asia and it was only there that the odd sale was possible. It is also nothing new that this interest is limited exclusively to cow hides, or occasionally also to heifers and low grades. In Europe, prices and the first deliveries after the Christmas break will now be discussed with regular customers. Pricing will be determined by the individual relationship between supplier and customer. Hardly anyone will be able to argue away the oversupply, especially of males, in the coming weeks.

The kill: There are no surprises in terms of the kill. The quantities are high and normal for the time of year. The catering trade and supermarkets are stocking up for the Christmas trade and the feedlots have to part with their animals. Fortunately, the surprisingly early and cold winter in our regions is encouraging meat consumption, so at least sales are fairly constant. The predictions of some market participants regarding lower kills this year have, of course, not materialised and the headline figures for Germany up to the end of October were almost unchanged compared to 2022.

What we expect: As has often been mentioned here, prices are only reacting to the supply-demand ratio to a limited extent. The only thing that can really be deduced from this at the moment is that prices will certainly not rise in the coming weeks. However, we consider it unlikely that a significant fall in prices would lead to any change in demand in the coming weeks. This certainly applies to Europe and therefore the only real impetus for the market will probably be limited to the behaviour of customers overseas.

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