What happened this week: Last weeks forecast was reasonably accurate. Many from the trade and in particular from the USA went to Shanghai. Most of the visitors agreed, that Chinas progress in the production of leather and the manufacturing is progressing faster than expected. Not only in terms of quantities, but also in terms of quality. The development in total remains impressive and one has to ask if the speed of the development can be maintained also over the next years. In terms of business it seemed, that those who came with high expectations to sell raw materials were mostly disappointed – as usual. It remains the problem, that still many people travel to trade shows in the expectation, that customers find this the adequate location to buy raw materials. So, we think that much less than what many sellers expected was fulfilled. This should not leave the impression, that demand is slow, but we have to accept the fact that the hide prices at present are above the ideas of the

buyers and they are not in such a desperate need to buy hides, that they are willing to accept the asking prices. So, were sellers and buyers ideas some percent apart and not many were willing to move. Unless sellers were not willing to match the bids hardly any sales were possible. This applied to the mainstream products. A bit different was the situation in specialties and sidelines. With tanners in China moving further, they are also open for discussions about new raw material options or substitutes. In this part of the business we were very satisfied with the results of the Show as a bigger number of samples and trials were concluded, than what one would normally expect. In the normal products such as cows and heifers some sales to the very regular customers at just unchanged prices were concluded. As a conclusion of the Asian trips we would say, that general leather business and outlook are reasonably good. There were very few tanners complaining about business and orders, but many about the inability to increase leather prices. That explains their

resistance to higher prices despite a positive outlook an even need to buy sooner or later. At home business was quiet with the new abattoir buying  dominating discussions and not as a surprise butchers were increasing their ideas by quite a bit, what in our view can hardly be justified except with the unrest due to the inroads new competitors make into the German abattoir market. The kill: Starting finally to improve. Not by much yet, but it seems that the worst is finally over. Mainly the kill of bulls was better and comes as a relief after the  problems and bottlenecks we were facing over the summer. We think that the kill is now going to increase further mainly also as a result of the draught what has left farmers in many parts of the country with feed shortage. What do we expect?  Not much changes. The market is trapped now in the existing price structure. Sellers will try to increase prices as a result of higher abattoir levels and tanners will do their very best to limit their increase of purchasing levels. So, really a chance for lower prices. For higher levels it will eventually become a tough fight.