What happened this week: Almost all activity was moved this week to the APLF in Hongkong – except the purchasing of abattoir hides in Europe. The interpretation of the results of the event in Hongkong will be different, depending on the material to offer and the expectations one had. If you draw the bottom line we met a lot of tanners from the magic triangle India, Pakistan, China who were very happy about the results of the show. Why? Just because the shift of production of leather and leather products moves on and they get more and more business which has been in Europe before. In addition to that, remain the growth rates of the economies in the East on very high levels and consequently also demand for consumer products continue to stay strong. Those, however who always turn strong demand into higher raw material prices got a lesson, at least for the moment. Many of our friends we talk to, know that we follow more the idea of the internal or real counter value of hides and it seems more and more, that this type of access to the market determines - more than ever before - the trend of raw material prices. At least until the general balance of supply and remains intact and the

tanners can chose from enough raw material options. At least for the moment and the near future this seems to be the case. With the rising, if not complete dominance of the raw material markets by the Eastern manufacturers prices are under control of their calculations and despite very good finished leather orders, prices for finished products continue to remain under pressure. This converted to the fact, that European cows and low grades can meet the price calculations and although a good number of sales were possible, price increases were limited. By the end of the week the weaker USD also absorbed some of the advances, so that the net gain vs. the weeks before remains very limited. Bulls found homes, but with the falling US market for steers, potential Asian buyers start to try also to get more cautious about bids for European material. However, at the end potentials in Asia for males continue to grow and we would call the markets out there now already set and prepared to be regular outlets for these hides as well. Prices for bulls remained entirely steady so far and further customers have been achieved by repeat orders or new sample containers. Adding the numbers sold during the week we are satisfied, because we normally dont

sell very much during these events. The bulk of contracts was done on cows and low grades and sales of bulls have at least been enough to absorb the surplus of material one cant place for the moment in Europe at sufficient prices. Prices were fractionally up on cows and steady on bulls and the main difference is made by the currency. The kill: We remain positively surprised. Slaughter remains very steady on levels which are slightly above our expectations for this time of the year. Weights are unfortunately falling, but this is just normal. With the short Easter weeks now coming up and the weather being finally spring-like anything but substantial declines in the weekly numbers would be a surprise. What do we expect: We think, that the trend is still intact. Cows and low grades fit into the calculations, but we don’t think, that there is much room for advances as they get too expensive then. Males will face a more difficult time, because the main European customer base fights hard for reductions. Here it will depend on how much one can escape from this pressure by using overseas markets to move product eventually weakening the sellers position. So, no news ahead. The established trading range remains intact with cows on the upside and bulls at bottom side.