This week: The second week of 2024 passed without any major events or excitement overall. The geopolitical situation remains the biggest problem at the moment, at least for those who are either affected by the transport problems through the Red Sea or are worried about what will happen in the war between Ukraine and Russia.

In other regions of the world, you can clearly feel that these things are of secondary importance. However, there are now signs that people in China are also thinking about how significant the impact of the transport problems could be on export business. The surcharges and freight rates for transport from China to Europe are increasing even more than the other way round. Delays in delivery due to the longer transport routes are also beginning to cause headaches for some. As a result, we are trading from week to week, from news bulletin to news bulletin, without any real planning certainty.

In our business, we can still see that Europe has not really woken up yet. The existing business is being managed and there are special events here and there, or one or two customers suddenly and urgently needing a special item. General business, however, is still relatively insignificant.

The situation overseas was also somewhat different this week. Female hides continue to be the focus in terms of sales to China. The same can be heard from our colleagues in the US. If we turn away from the cowhide business for a moment, it is also remarkable that there are increasing numbers of enquiries for sheepskins and lambskins again. Of course, the asking prices do not cover the costs, but the mere fact that people are interested in this product again is remarkable enough.

In terms of sales, the focus this week was once again on the trades in Asia. At the beginning of the week there was still very active interest and the possibility of realising one or two sales, but by the end of the week interest and activity had waned considerably. The battle for prices remains tough. 

If we talk about cows in very general terms, interest is very selective and, generally, the heavier the hide, the easier it will be to sell. With the focus on overseas business, logistics are becoming more important every day. Apart from surcharges and rising freight rates, the battle to secure space on scheduled ships has become increasingly intense. Reliable and binding bookings that actually materialise are decreasing significantly. If the logistics problems cannot be solved in the next few weeks, longer-term consequences must be expected.

The kill: Kills were affected this week by farmers’ protests against several government decisions. In some cases, entire slaughter days were cancelled and sometimes the planned volumes could not be achieved because sufficient quantities of livestock could not be transported. Of course, this is only a temporary problem, which means that production will only be postponed. At the moment it is not yet possible to predict how the protests and possible restrictions will continue, but we are assuming that things will normalise in the coming weeks.

What we expect: There is a lack of conviction that we can expect any serious impetus for a clear trend development in the coming weeks. On the one hand, regular negotiations with regular customers in Europe are due again in the next two weeks, but on the other hand, Asia is now slowly preparing for the interruption for the New Year celebrations in February. We all know that modern means of communication make everyone accessible at all times, but of course we don’t know to what extent this will be utilised. Several important consumer goods fairs have already taken place in Europe and will continue to do so in the coming weeks. Short-term impulses are not to be expected, but fundamental moods can be anticipated. It will be particularly interesting to see to what extent stocks have already been reduced and may lead to more active ordering activity for the coming seasons. We do not see any short-term reasons for significant improvement or deterioration in the demand situation in our market. Overall, it remains the case that the goods are not selling on their own and there is no feeling that production is covered by brisk or active demand.

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