What happened this week: Expecting last week’s business activity to be low was a tremendous exaggeration. No activity at all would have been a more accurate prediction. Isolated inquiries from the few tanners that have already returned from their holidays were the only activity seen. Asia was quiet as well, at least in our case. Rumours about a weaker US market and the general uncertain mood surrounding oil prices kept buyers in the wait and seeking a new position. Traditionally, Asian tanners are greatly influenced by the US market trends and disappear as soon as they get the feeling of weakness in this part of the world. The market is in a very difficult period as sellers are taking a firm position while tanners need lower raw material prices to purchase only what they need, and not a single hide more. In addition, we are quite affected by the increasing financial problems in China. Letters of credits are opened with further delays and we have to realise that more and more awkward payment proposals are being made. This definitely does not apply to the key players but to smaller importers and tanneries who seem to be in a steadily worsening financial difficulty. If this is the final result of the general government policy or the result of insufficient margins or sales, more will be clarified with the trips to Asia, scheduled for the end of this month, which will definitely offer more information on this subject. The general trend for the weaker dollar, which again accelerated on Friday afternoon, is burdening calculations on top of the low weights and kill. It seems that many in the trade have not yet recognised the deteriorating conditions and abattoir prices, once again, have not adjusted to the market levels for the month of August. However, this is not unusual for this time of the year where processors are more impressed by the low numbers and positive expectations for the post-holiday period, rather than analysing market realities. In euro terms we have to consider buying levels of at least 10% above market reality. This applies mainly to dairy cows which are much more influenced by currency fluctuations. The market for bulls is beginning to return to normality with regular buyers returning to work. It will be interesting to see if inventories of bulls built in the vacation period will now find homes. The kill: Still on holiday levels and in the next two weeks we do not expect any change. The proportion of females continues to be below previous years and expectations, as well as below the average weights. Towards the end of the month we should start to see some relief. What do we expect? One has to start wondering now about the market progress towards the autumn. Due to decent leather business and the growth in China most are positive for the new season, with tanners trying to play enthusiasm down and warning about raw material prices. Since we have been on the positive side for the first half of the year we are starting to have growing concerns for the coming months, regarding the financial side of the business. The next week will see pressure on cow prices in euros.
|
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 |
€ 1,40 |
Weaker |
|
Dairy cows |
15/24,5 kg |
22,5/23,5 kg |
13/22 kg |
20/21 kg |
€ 1,50 |
Weaker |
|
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 1,40 |
Weaker |
|
|
30/+ kg |
33,5/35,5 kg |
27/+ kg |
29/31 kg |
€ 1,25 |
Weaker |
|
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 |
|
|
