What happened this week: The trend from last week continued into this one and, as far as business was concerned, cows moved further into the foreground. While many were or still are suspicious about the general demand for leather, it seems to be a matter of price again, as many would say, when prices fall the demand increases. We found plenty of interest for cows this week – in particular from Asia – and a decent round of sales took place. It is difficult to establish a satisfying price level at the moment because the situation is entirely against the seller. The dollar has been falling continuously nearing its record low, but abattoir prices have not been adjusting to the market. Yet, if one is fair and not squeezed by company economics, nothing else is currently happening apart from the readjustment of cow prices. These rose considerably in the first half of the year as a result of a firmer dollar and a larger number of Chinese tanneries entering the upholstery market, starting productions and using standard and medium quality hides. In the meantime, overcapacity and price pressure for finished products are forcing more tanners into cheaper raw materials or even to smaller purchases because the total market potential at the moment is not enough or not profitable for all. In China too the good and strong are separating themselves from the rest and need to purchase hides at adequate price levels to keep on tanning. When one looks at price levels under these conditions nothing abnormal seems to be happening. We are just returning to the levels seen a year ago and a trading range for cows between $45-50 is an absolute normality. No fun for euro prices, however, since the dollar has devaluated roughly by 15 % against a year ago and, consequently, prices in euros are still inflated. While many are over-concerned about the market situation we still believe that the global leather demand is intact under the condition of adequate price levels. Activity in bullhides was also reasonable. While European buyers were present, more considerable interest came from Asian customers who are obviously trying to protect themselves against the steadfast US big packer market. Finding a price here is also a struggle, not because prices as such are wrong, as they fit into the global structure, but because they do not fit into abattoir price levels. Every sale is since a forward option for when abattoirs make their corrections and adjust to market realities. Sales summary of the week: Volume satisfying, prices not at all. The kill: Quite good and normal in total but the numbers of incoming males is still very low, while the seasonal cow slaughter is on the high levels one can expect for the second half of October. Everybody’s wondering now when the larger slaughter of bulls is going to start. What do we expect? Next week the market will just wait for the results and impressions from the fair in Bologna. Watching the general trend we believe that the market is now starting to settle. It might need another week or two but we will have a fair chance to rest a moment as price variations should derive more from the currency markets or other external effects. We cannot see a reverse trend, however, so the latent pressure will persist.
|
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 |
€ 1,50 |
Steady |
|
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 1,40 |
Steady |
|
Dairy cows |
15/24,5 kg |
22,5/23,5 kg |
13/22 kg |
20/21 kg |
€ 1,45 |
Correcting |
|
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 1,35 |
Correcting |
|
|
30/+ kg |
33,5/35,5 kg |
27/+ kg |
29/31 kg |
€ 1,23 |
Correcting |
|
Bulls |
25/29,5 kg |
27,5/28,5 kg |
22/ 27 kg |
25/26 kg
|
