What happened this week: The situation developed more or less exactly as anticipated. At the beginning of the week the market in Europe entered into almost a panic situation. The USD fell to below € 1,17, the slaughter in Europe rises seasonally and the customer base is in this part of the world limited to the few tanners operating in car upholstery and some parts of the shoe upper and luxury leathergoods business. All this is neither new nor it would be a big problem if the abattoir price levels would or will adjust enough to settle the market back to levels where the tanners margins are protected. We still believe, that on a global scale leather demand in total is still good enough to absorb the hides produced. This excludes individual problems of particular hide types. So are hides suitable for the medium and higher end of furniture and shoe upper  qualities certainly very difficult to sell at the moment, because this consumer segment suffers most from the mentality of producers and consumers, that everything has to be

cheaper tomorrow. We believe however, that the argument of many tanners, that cheaper prices would stimulate demand does neither meet the problem nor it is even true. We believe much more, that the trend, that more business is concentrated in less hands is the simple reality. For the others the impression of a lack of business is obviously dominating the scene. Well, towards the end of the week business started to settle a bit more and following closely customers, markets and prices, offered various opportunities to sell also this week enough volume to keep the product flow intact. Prices of all kinds  were thrown around the trade and highs and lows in the daily gossip saw easily a spread of more 10 %. We can only speak about us and here we faced only moderate declines of about 2-3 % versus one or two weeks ago, not considering the currency factor. While in Europe only limited options for sales where available – mainly also to the normal market paralysis during the abattoir buying period – offered the Asian market once again the better chances and with a bit of luck in the currency market plus the willingness

to take a reasonable bid enough volumes in dairy cows and low grades could be placed. However, it needs to be mentioned, that all this involves the necessity of the abattoir price adjustments we considered already necessary last week. A beginning was made in the auction in Brussel and the abattoir prices in The South of the country which fell remarkably. This paves the way also for our part of the country were the errors of September need to be corrected and the price adjustment to the market requires the abattoir reduction minimum to the levels seen in June/July or may be even more.  Our opinion is, that this is less a question of what ‘the market level’ is today, but much more the need to settle prices on a level workable for the hide and leather industry for the coming months to save business activity. The kill: Nothing spectactular. Levels are normal for this time of the year and hides are coming  in good quantities to allow straight forward productions and deliveries.  What do we expect?  Prices will settle after the abattoirs are fixed. Pressure persist, but we think that the levels of next week will be again a solid base in the coming weeks.