What happened this week: The focus of the business this week was less on the purchase and sales of hides and more on the currency market, particularly on the value of the dollar. During the European and US trading hours the dollar was loosing a cent per day. Not only is this weighing heavily on hide prices but will eventually also affect leather prices and the entire competitiveness of the industry in Europe. If the speculative bubble does not adjust soon, it will create a dangerous base for the European leather industry in 2005. Trading this week has finally shown more vigour than in the previous ones with increased interest from Asia. Morning calculations, however, became obsolete in the afternoon once the dollar concluded its daily descent. This applied mainly to bids for cows which came in predicted higher numbers and proved almost unworkable due to the currency situation. Consequently, very little business has been concluded in this direction. On the positive note, it is comforting to know that interest from Asia has not disappeared completely. The news from that part of the world remains mixed. While some tanners are opening their L/Cs regularly and some even swiftly, there are rumours some of the largest upholstery tanners are suffering from bad business. This is said to be showing through L/Cs delays, contract cancellations and lay-offs, all attributed to insufficient production. How exaggerated or true these rumours are remains to be seen. In any case, it is clear that the automotive business in China is not meeting budgets and some furniture leathers are well behind schedule. Apparently, few European suppliers are visiting China at the moment, due to things not being brilliant out there. In Europe business has, once again, been better this week and isolated sales of dairy cows to Italy have been reported. Hides for vegetable and side leathers were in reasonable demand and, although slightly affected by the weak dollar, sales of bulls and heifers remained at acceptable volumes. Some order books must still be filled in and business is far from brilliant at the moment. It is, however, much better than overseas, moving at least half of the production at a normal speed. Light weight material has, once again, found decent demand and it seems that the next three months will have a good clearance of all the sidelines, a result so hard to achieve in the past two years. Price developments reflected the divided market. The weak dollar is burdening export revenues as prices in dollars remain steady, while European sales are running at their normal course of steady to moderately downside corrections. The kill: Remained at a normal level. The cow kill is still running at its seasonal high and, under normal conditions, should start to fade in the weeks to come. We understand that beef business is still quite good and cold weather is laying the basis for good slaughter in the forthcoming weeks. What do we expect? The driving factor behind prices is the currency market. Against the common opinion, we believe the worst period is over. If the dollar does not take another dip, the market should enter a period of consolidation, with prices not changing much anymore. If it continues to be low, there is also little hope for higher prices.
|
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 |
€ 1,48 |
Pressure |
|
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 1,35 |
Pressure |
|
Dairy cows |
15/24,5 kg |
22,5/23,5 kg |
13/22 kg |
20/21 kg |
€ 1,40 |
Pressure |
|
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 1,30 |
Pressure |
|
|
30/+ kg |
33,5/35,5 kg |
27/+ kg |
29/31 kg |
€ 1,15 |
Pressure |
|
Bulls |
25/29,5 kg |
27,5/28,5 kg |
22/ 27 kg |
25/26 kg
|
