What happened this week: We are currently in a quiet period of the market. The lack of fundamental news, the holiday period and the low season in most of the leather sectors are contributing to the trade being busier in speculation than in real business. In addition, many European sellers are using the summer break as an opportunity to travel to Asia, China especially. Customers over there must be under the impression of an invasion and, as usual, it only adds to the general confusion. Trading this week was generally subdued. Despite all the enthusiasm regarding the allegedly rising prices, firm markets overseas, low slaughter and the excitement regarding China’s market potential, we remain unimpressed by the situation. Although inventories are generally low and the leather business seems acceptable, it can be concluded that tanners overseas are not willing to accept asking levels at the moment and either withdraw their interest or buy from cheaper sources. The weak dollar is not alleviating the situation, quite reverse, and even revenues in the euro are declining. The prices at which sales are currently performed are steady, but nothing more. All the above applies to cows, where the market is being increasingly dominated by exports. The situation is different with bulls. Most prices were set a week ago and do not require renegotiation. The overseas influence is present but not as large as with cows. Total sales this week were moderate, below the average of the previous week, a natural state for mid July. The problem is that abattoir prices do not fit into the present market environment, unless higher prices can be achieved. The European market was very quiet this week. Some activity was noted whenever tanners needed to fill small production gaps, but in general, a holiday mood prevails. Dealing with cheap, low grade material, which found decent interest, was a good move this week. With the right price it is worth getting rid of the stuff which is always piling up when there is an abundant supply of normal material. It needs to be moved and, if the present market permits, the sales are readily taking it. The kill: Nothing new. The kill is low, on typical summer levels. Latest reports about the EU kill in 2004 show an increase in Germany and Belgium and a sharp decline in Denmark. Others are reasonably steady. In the coming weeks we expect steady to lower kills resulting from the peak holiday season. What do we expect? With the markets growing increasingly idle, due to the holiday season, we are not expecting anything big. Any movement or activity can only come from overseas customers or from a surprise purchase from Europeans. All one can hope for is some buying activity after the holiday season. As already mentioned in the previous weeks, sellers are not burdened with too much inventory or the need to sell. Consequently, the market is likely to remain inactive from the supply side. We will keep an eye on the currency markets as they might have more influence than anything else at the moment.
|
Type |
Weight range |
Avg. green weight |
Salted weight |
Avg. weight salted |
Price per kg green weight |
Trend |
|
Ox/heifers |
15/24,5 kg |
22,0/23,5 kg |
13/22 kg |
20/21 kg |
€ 1,55 |
Steady |
|
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 1,37 |
Steady |
|
Dairy cows |
15/24,5 kg |
22,5/23,5 kg |
13/22 kg |
20/21 kg |
€ 1,50 |
Threatened |
|
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 1,36 |
Threatened |
|
|
30/+ kg |
33,5/35,5 kg |
27/+ kg |
29/31 kg |
€ 1,23 |
Threatened |
|
Bulls |
25/29,5 kg |
27,5/28,5 kg |
22/ 27 kg |
25/26 kg |
€ 1,52 |
Steady |
|
|
30/39,5 kg |
36,0/37,0 kg |
24/34 kg |
31/33 kg |
€ 1,45 |
Steady |
|
|
40/+ kg |
45,0/48,0 kg |
34/+ kg |
38/40 kg |
€ 1,38 |
Steady |
|
|
