What happened this week: There was the temptation to skip this report and focus on the forthcoming weeks as this week has been a non-event in normal bovine hide business. The only activities registered were some trader activity and isolated renewals of programmes. Trading activity was completely paralysed by the carnival, the Chinese New Year holidays and the usual standstill in abattoir negotiations in continental Europe. The last appears to be the biggest problem, especially for butchers fearing low kills after Feb/March. Their margins are already squeezed moving the revenue of the by-product(s) back into the foreground. Structural changes in the trade are in view as the tanning and the slaughter industries are eyeing up the flow of raw materials, adding to the competition. Consequently, this is increasing the pressure on the processing industry threatening the squeeze of valuables. 2005 will, in any case, mark the biggest changes in the past 20 years with long-term market structures settling but short-term ones facing further turmoil. On the daily business front we can report highest activity from the light weight material (kips) with continuing interest from various destinations. We are under the impression that the Chennai fair has been a success in terms of demand and interest for leather and shoes. The leather fashion show in Munich has also delivered positive reports with a trend of back to natural and high quality products. We hope this tendency will also penetrate into the leather garment market. Upholstery and automotive tanners seem to be doing well with some showing reasonable order books –the price still remains the main issue here and nobody is rushing for hides. Asian tanners are already off or preparing for their holidays and the only positive sign from that end of the world is a number of clients still settling payments or opening L/Cs. Yet things have certainly not recovered from the general implosion of the Chinese demand in the second half of 2004. The firmer dollar has only had a limited effect on the market so far but if a firmer trend led to a trading range below €1.30 it would offer slight relief to European raw material and leather exporters.
The kill: We are entering the carnival week and the kill is low but within the normal seasonal range. Most of the negotiations with the beef industry concern the future after March, when anything other than a remarkable drop in the kill would be a surprise. This business is, however, prone to surprises. We expect no change to the steady lower level slaughter numbers in the next weeks.
What do we expect? Next week will remain quiet. Some trading may take place in Europe but Asians are unlikely to be spoiling their holidays with purchasing activities. Next week the market should struggle to leave the present trading range and the financial markets could eventually be more important than the hide market as such. Hence, our hide prices are reasonably cushioned but not yet ready for a significant upward move.
|
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 |
€ 1.45 |
Steady |
|
|
25/29.5 kg |
27.5/28.5 kg |
22/27 kg |
25/26 kg |
€ 1.35 |
Steady |
|
Dairy cows |
15/24.5 kg |
22.5/23.5 kg |
13/22 kg |
20/21 kg |
€ 1.40 |
Steady |
|
|
25/29.5 kg |
27.5/28.5 kg |
22/27 kg |
25/26 kg |
€ 1.27 |
Steady |
|
|
30/+ kg |
33.5/35.5 kg |
27/+ kg |
29/31 kg |
€ 1.18 |
Steady |
|
Bulls |
25/29.5 kg |
27.5/28.5 kg |
22/ 27 kg |
25/26 kg |
€ 1.50 |
Steady |
|
|
30/39.5 kg |
|
