What happened this week: Business activity last week almost came to a standstill until Wednesday when most of the trade finally assembled in Bologna. As usual, the show opened on Tuesday but only started on Wednesday to finish on Thursday morning. The poor exhibitors have to attend three full days while for visitors one day is enough. When it comes to results from the show, ‘mixed’ might be the best expression to use. While high quality tanners generally expressed satisfaction with customer traffic, interest and sampling; in the medium lower end results were mostly disappointing. Leather prices remain under pressure and many tanners continue to find it difficult to understand how they can compete with prices the customers claim to have been offered. All this applies to the leather side of business. A similar situation was true for furniture, an area of less importance to the fair, and most suppliers who took the chance to visit Arzignano during the week were mostly disappointed. Those impressed with the stocks of cheap wet blue in their area were mainly visitors from the Southern hemisphere with more economical hides to offer. Medium and higher quality hide suppliers were slightly more successful and top quality suppliers certainly found enough interest to return home with a smile on their faces. Difficulties in the automotive industry, with Volkswagen facing production interruptions in a current labour dispute, also failed to benefit from the general mood. To sum it up, we are of the opinion that the trend in general is for fewer but better quality leathers – at least in Europe. A continuing trend for cheaper and lower quality leathers will eventually disqualify the product from mass production. Other factors, such as problems in the lambskin business with setbacks to Russian imports and the weaker dollar are failing to maintain price levels for the average raw material. The dollar was the shock of the week for those who left their desks early last week. The currency slumped by almost 2% over the weekend and made many calculations outdated. Sales during the week were concentrating on lighter weight hides for side leather tanners. Interest from Asia was very small and only a few sales of dairy cows to Italy were seen. Prices remain under the latent pressure we expected, but in general, any large changes from the previous week were not noticed. At the end of the day it is less a question of price but more of satisfying volumes that sellers want to move. The kill: The kill saw some of the increases we have been expecting for a while. Whilst it went up sharply on cows, it did not rise as much on bulls. Fortunately, hide weights are also starting to increase. It seems that we can expect further increases in slaughter numbers in the week to come with a peak next month. What do we expect? We think that the market continues to face further price pressure as the continuing decline of the dollar has not yet been fully absorbed. Higher kills will not encourage sellers to raise asking prices. In the catholic parts of Europe next Monday is a holiday, which will not assist activity either. The results of the US elections will also be awaited. Therefore, next week should be reasonably quiet and without great expectations of price changes. Before the results of the next round of abattoir buying come to view anything else other than pressure on selling prices would be a surprise.
|
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 |
Pressure |
|
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 1,40 |
Pressure |
|
Dairy cows |
15/24,5 kg |
22,5/23,5 kg |
13/22 kg |
20/21 kg |
€ 1,43 |
Correcting |
|
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 1,34 |
Correcting |
|
|
30/+ kg |
33,5/35,5 kg |
27/+ kg |
29/31 kg |
€ 1,20 |
Correcting |
|
Bulls |
25/29,5 kg |
27,5/28,5 kg |
22/ 27 kg |
25/26 kg |
€ 1,53 |
Pressure |
|
|
30/39,5 kg |
|
