What happened this week: The market is just stumbling and really not here nor there. Last week we felt, that the USD has given some support, and so did it early in the week, to fall again sharply towards the end. So, one becomes more a currency dealer at present and a good hand on the currency market can make or destroy a week –at least as far as the export business is concerned. But the currency market is also becoming more and more a guideline for the European customers as well. Many of them are also exporting their leathers and so their mood is strongly influenced by what they see on the screen. Sales were again moderate this week. Not bad in volumes with the regular programs being renewed and some spot deals for dairy cows and low grades for the Asian market. However, one can still see that tanners don’t rush to buy hides, because they feel that they might have another and last chance to turn the price levels their way before the year ends. And indeed it seems, that most sellers are not anymore betting on a positive change in the market in 2003. Having said this, it did again not prevent individuals from spending

too much money at the abattoir door also for the month of November and getting the butcher to take his fair share in the decent of prices we have seen now over the past months. For the time being tanners have all the arguments in their hands. Higher kills, lower USD and the upcoming holiday season, what is a fair amount of arguments to be presented to the sellers. Having said this we can, however sense with our regular buyers and long term partners, that they see also the writing on the wall, that the higher kill is only temporary and that the supply will fall again – most likely when their productions resume to full gear again. So, there is plenty of underlying interest to secure supplies at present levels or even better at lower prices and proposals are made to cover a longer period at present levels. We would wish they had the same ideas when the market is 30 % higher.  For the European male customer base we are quite confident, that they will try to save as much as they can in the coming weeks, but not let the chance pass to secure their existing margins. They are aware, that they are buying relatively cheap raw material. In dairy cows however, the European market is sour. The Italians have problems with their

leather business and enough hides to get into the New Year or even further. So all depends on the Asian customers, which have watching, but not buying recently. From all what we know it would be a big surprise if they don’t come in for another round of buying before Xmas and it is just a question of nerves and a good decision on the currency market to get it right. But it might still need some patience.  Prices during the week eroded again fractionally and compromises had to be found at about 1-3 % below asking levels. The kill: The kill is moderately declining now. Not much yet, but one can see that the seasonal peaks are behind us. We believe, that this is also going to be the trend for the coming weeks. The kill of males remains good, but it seems that with Xmas also this party is over again. What do we expect?: Well, we are quite optimistic about the volumes of sales in the coming weeks. Programs and inquiries are already on the table. Not so optimistic, that it will be easy to find an agreement on prices. At the present levels it is not advisable to bet too much on substantially lower prices in the future and so the price tuning has to be done with great care. Buyers think the opposite. However, we trust that the capability to find agreements will be around this weeks price levels.

Dairy cows

15/24,5 kg

22,5/23,5 kg

13/22 kg

20/21 kg

€ 1,70

Steady

25/29,5 kg

27,5/28,5 kg

22/27 kg

25/26 kg

€ 1,50

Steady

30/+      kg

33,5/35,5 kg

27/+   kg

29/31 kg

€ 1,23

Steady