What happened this week: Our week was interrupted by a holiday on Thursday. So, domestic activity was consequently pretty quiet and many took the chance for an extended weekend or even a full week holiday. Internationally the situation was a bit better and those working on Thursday were able to collect some orders from Asia – which one was really waiting for after some weeks had been reasonably quiet from that part of the world. At the end it was nothing special, but some sales for dairy cows were generated which was able to lift a bit of our concerns in this part of the market. Certainly we got the help from the US market this time, which help by delivering a slightly stronger tone. Prices were just steady and so there was still no chance to obtain the necessary increases to get back to margins which would be acceptable. Low kill, light weights are still weighing on the calculation and the market has still not digested the increase in abattoir prices paid in April. The weaker USD towards the end of the week

was not helping either. A bit better was the general mood again in the sidelines. Veals, kips, sheep and lambs enjoy more interest and at least in the case of the cheaper, lower quality merchandise it starts to move stocks which had been searching clients for quite some time. This might be still a result from the new articles presented in Bologna which at the beginning where favouring better quality products, but now there seems to be also more positive response for the fantasy and more economical articles. The rest of the market was determined by isolated developments. Bulls remain in steady demand, but prices vary more than seen for a long time. Selected items/origins suitable for specific, mainly vegetable oriented articles obtain fair premiums while standard production for upholstery or side leathers are still fighting with strong resistance from tanners to pay more. So, one had to pick occasions which here and there were available when tanners had to fill supply gaps or were covering incoming spot orders for leather. The general problem for tanners in the lower price segment remains sufficient

procurement of raw materials which are cheap enough to meet the leather prices tanners still have to supply for. The biggest challenge for the market at the moment remains the price pressure for finished products.  The kill: Well, what can we expect at this time of the year? May is becoming now traditionally the lowest season and with the new regulations of the EU subsidies due at the end of 2004 we don’t expect much for the summer either. Everything points into the direction, that the kill is going to be high after October. In the meantime abattoirs as well as farmers holding back, everyone for his own reasons.  What do we expect: Our market is now driven by the lower supply, mainly of bulls. Sellers are able at present to do some raisin picking without the stress to move substantial volumes. Cows are a bit different and depending entirely on the situation in Asia – and the currency. Italian tanners are searching bargains again, while Asia has still a strong cap on prices, which means, that only the currency can assist to obtain better revenues. We think, that the market is on rock solid ground, but is not yet mature for an outbreak out of the 2004 trading range.

Dairy cows

15/24,5 kg

22,5/23,5 kg

13/22 kg

20/21 kg

€ 1,55

Steady

25/29,5 kg

27,5/28,5 kg

22/27 kg

25/26 kg

€ 1,36

Steady

30/+      kg

33,5/35,5 kg

27/+   kg

29/31 kg

€ 1,23

Steady