What happened this week: The North German farmer would lift his cap, scratch his head  and say: Tschääh! what means nothing and leaves all options open.  This is basically how one would like to get out of the attempt to describe this weeks market situation. At least we were wrong in our expectation, that the market would be pretty quiet and with the approach of the decision from the USA/UK about the war against Iraq the trade would fall idle. Activity from European tanners was impressive but remains selective as far as the customers are concerned. In any case sales in numbers were high again and the greatest interest and buying activity derived from side leather tanners. This added to some selective quality buying from upholstery tanners and demand for low grades from Asia. General interest from the Orient was however, limited and sales are difficult to calculate at present as the USD is falling quicker than one can conclude and cover export sales at present.

So far the general positive note on the week. Worrying is indeed the steep fall of the USD. As usual you have the short, medium and long term effects. Short term export raw material prices in € terms have to adjust as the USD related market don’t rise equivalently, medium term the finished product export prices suffer and imports gain while long term production cost could become critical. All in all the better demand and consumption of hides is easily compensated in most grades by the currency situation. USD and also L-Stlg. Have lost a fair amount of their value, what has changed price relations tremendously. The present market situation is also in general difficult as butchers tend to ignore such kind of circumstances and defend massively against the necessary reductions to compensate for the devaluation of German hides in international relations. This is very difficult, because price reductions are not demand related what is double difficult to explain the abattoirs. Due to the regular sales the demand for product and the need to

ship does not permit many processors to turn quantities down, what would be the best argument for lower prices vs. a butcher. The need for price declines to stay globally competitive in the medium term combined with steady demand seems impossible to be explained. The kill: The kill is still steady with just the decline Monday to Wednesday due to the carnival. It seems that the kill is going to normalize completely in the next weeks. What do we expect? The market will also next week be driven by the global discrepancies in demand and currencies. For our prices and situation we assume that prices will again not change very much. The rising value of the € will in most grades be compensated by the good demand for hides. However, some discrepancies between origins and grades need still adjustments, just to erase the unjustified differences. More than that one can hardly expect with assuming, that the coming week should finally bring the decision about the Middle East conflict. We can only hope, that the situation will be clarified before we all have to travel to the Far East.

Dairy cows

15/24,5 kg

22,5/23,5 kg

13/22 kg

20/21 kg

€ 2,08

Steady

25/29,5 kg

27,5/28,5 kg

22/27 kg

25/26 kg

€ 1,88

Weakish

30/+      kg

33,5/35,5 kg

27/+   kg

29/31 kg

€ 1,53

Weakish