What happened this week: The settlement of the market continued. Although trading activity was relatively quiet the number of sold hides again reached a very adequate number. Asia became active again this week. Prices for many items, such as dairy cows, ox/heifers and low grades have returned again to the levels which have been always attractive for buyers in overseas destinations. European activity was either concentrated on the regular and classical program sales or for prompt shipments. A number of tanners have either got prompt new orders for immediate deliveries or still had some production days open which still needed coverage. Most of the interest in Europe was either for low grades, ox/heifers or heavy dairy cows, not counting the traditional and regular requirement for bulls. The biggest surprise of the week was, however, the sharp decline in the slaughter. Not so much the fact itself, but that it came from one day to another and has hit mainly the males.

After the longer period of better supplies some find it difficult to re-adapt to tighter supplies and understand that markets will remain mainly supply driven in the future. Looking back at the results of Bologna, we are a bit disappointed that the demand for kips has not benefited and the demand for higher quality calf continues to be dominant in skins. Despite the disastrous state of the German economy, it seems the world demand for consumer goods is still reasonable enough to absorb most of the production, and the persisting growth in automotive and side leather seems to compensate for the problems in garment and, in part, furniture.

Prices during the week fell again slightly on lighter weight dairy cows but found a floor now. Ox/heifers did very well and bulls got their support from the reduced slaughter. So, one can say that the market has for the moment completely settled in all categories. With insufficient adjustment at the abattoirs for the month of November a further correction for December is now needed at the abattoir door to reflect the market levels which seem to be the present market reality.

The kill: The decline that we reported  last week continued this week and we did not see any recovery in the slaughter of bulls. Cows slaughtered remained quite normal, but  here we expect moderate declines into December. Slaughter weights remain stable.

What do we expect? The market settlement continues to be in progress. After a long period of correction a lot of the inflation of hide prices has been removed and many grades have returned to reasonable levels. Checking our indices we are very close to the long term averages and are consequently in the neutral zone. We remain of the opinion that the next weeks should not deliver major surprises on prices anymore. Supply and demand seem still to be in reasonable balance at present. Reduced supplies for the coming months should be taken into consideration for the medium term planning.