What happened this week: The hope for a clarification in the Middle East has been disappointed and postponed. Although the risk of war has risen today again. So, those who tried to wait for a decision about purchases this week were in many cases forced again to decide or to wait again. Many decided to buy. The sharp increase of the USD towards the end of the week - back to the levels we had seen for many weeks - supported export sales and revenues. Interest was again across the board and selling prices were – as expected – on or just about asking levels. If there was any concentration in the demand, it was seen in ox/heifers and dairy cows,  as well as again in low grades. With the firmer USD orders after Wednesday turned into good prices in € which were desperately needed to compensate the unchanged buying prices at the abattoirs for the month of March. Next week many long term contracts for bulls have to be renewed and with the decent sales and the firmer USD the sales position is getting a bit better and easier. Also for this week there is truth

in the statement: The situation is better than the mood. True is also, that the pressure on finished product prices persist. This was also confirmed by the first reports from the GDS fair in Duesseldorf. Less visitors, concentration on major names and brands and strong requests from the retailers to lower prices for shoes and consequently for leather. Since there is very little room to lower prices with the present raw material levels, many decide to reduce selections and quality levels to meet the requests of their buyers and to secure the orders which are needed to keep productions running. This is not only the case with side leathers, but also more and more heard in the upholstery section. In the automotive business we sense time for a change. Sales and production in Europe and the USA seem to be fairly under pressure, while the demand from existing and/or potential customers in the Far East is massively rising. We don’t know the reason, but could imagine, that this might reflect the expectation for the sales of cars depending on the regions as well as price. It might finally again  increase  the price pressure on finished leather in this segment. The key question is now, if

eventual reductions in production can be absorbed by further penetration of leather in cars. So, the situation is still characterized by reasonable business with deflationary pressure. The kill: The kill remains on the same level which we have seen over the past weeks. We are unfortunately already feeling declining average weights. In the coming weeks we believe, that this trend is going to continue while the kill can not be expected to change. What do we expect? Although it might be boring, but we still not expect any major changes. The pressure from the currency situation has been significantly been lifted. Inventories remain pretty low and many sellers are already fairly well sold forward. With the good sales seen over the last weeks the pressure on sellers has been almost eliminated. In a normal situation we would expect under these conditions even a firmer tone. However, massive pressure on leather prices and finished products,  the uncertainty about the global economy and political situation does not permit sellers to ask for higher prices yet. Lower kills in many parts of the world and low inventories protect the markets on the other side from further declines.