What happened this week: The market divided into two sections over the week. While demand for dairy cows remained strong from the Far East and another rise in selling prices by one USD or so compensated for the further decline of the USD, was the demand in Europe very slow and worries are mounting if and when the European tanners will return to the market. While the production of cows is reasonably well absorbed by the overseas export sales and the absence of the traditional European customers (Italy) is not yet particularly worrying, one has to start to wonder a bit about the market of males. Not so much as the Northern European regular buyers are concerned, but more from the customer base in the Mediterranean where

See table below 

sole leather tanners and also some side leather tanners are showing very little interest. In addition also more offers from various European countries are seen, so that for the moment at least a surplus of salted bull hides have to be noticed in the market. This leads to conflicting opinions within the trade. While many predict now a very low kill for the weeks to come and consequently a fair chance to clear the supply quickly when tanners have to return to the market, one can find others who are concerned about the leather demand and order situation due to the political uncertainty as well as the problem to calculate export prices for leather due to the rapidly rising value of the €. As usual it seems, that everyone is right and only the timing of decisions is the key to success. We

think, that at least in Europe a lot of order decisions in the pipeline are postponed as nobody in production and retail wants to be caught with excessive stocks after the poor Xmas season and the uncertainty how markets are going to react to the final decisions taken regarding the war with Iraq. The kill: The kill dropped suddenly and sharply on males beginning of the week, while the production of females reduced only slightly. We have absolutely no clue how the slaughter is going to proceed, but lower kills would not be a surprise. What do we expect? In case the overseas demand for dairy cows persists, prices will be at least steady. However, the € prices will entirely depend on the currency market. Bulls will  maintain their softer trend until more and regular interest for salted hides will be noticed.