What happened this week: The easiest would have been to copy last weeks report. The situation remained almost unchanged. Sales were on lower side, but some export business was concluded and total numbers have to be considered as acceptable for the time of the year.

Remarkable in our case was more the stronger demand for sheep and lambs in particular from Turkey, what confirms that expected seasonal improvement in this market is on its way. Most other European customers are still on holidays and only next week we expect customers North of the Alps to be back at their desks. The following two weeks the remaining ones should also return, so that we should have normal market conditions by the end of the months.

Fascinating is the fact how many new potential overseas customers are contacting us at present. In their search for alternatives and better quality hides many try to expand their raw material sourcing and investigate now the European markets. Not every contact is turned into business, but many are very serious in their attempts. The interest is mainly for shoe and leathergoods and not for the classical overseas items such garment and upholstery. This reflects also pretty well the situation in the finished product markets, where it seems that these segments are doing much better than upholstery and garment. In general however, we find it still very difficult to judge the situation correctly.

With the high uncertainty in the world economy, consumer attitudes remain very difficult to be forecasted. In Germany in particular we suffer now from the severe floods and it remains to be seen how it is going to influence the economy. To pay for the damage higher taxes are an option and if the destroyed infrastructure could also burden the economy has to be seen. The same applies to the damage in agriculture where the floods also could influence the kill significantly if animal feed is going to be short or cattle cant return to the fields quickly.

The kill: No news. The kill is slightly better. Prices for the month of August came down, but not enough to compensate for the margin problems.

What do we expect? Next week should be the last one with reduced activity. Prices will not change very much, as present levels fit quite well into the present international price structure and without any major movement in the competing markets we fail to see any significant variation in our levels.