What happened last week: For those in Europe in particular, last week was influenced more by the EU referendum and its effects on the currency market than on the hide industry. On Monday, there was a reasonable amount of interest seen from Asia, but it dried up when the euro started descending on Tuesday. Many overseas customers saw this as an opportunity to buy cheaper on the terms of the dollar, and so preferred to sit back and wait to see how the European suppliers were going to react. Most of them assumed, of course, that those priced by the dollar would immediately fall, the same way as when the dollar went up but, as far as we could see the prices did not change and buyers and sellers drifted further apart as the week went on. Hence, at the end, only isolated sales were concluded.                                    

The much predicted agony took place in Europe. Business was scant as most buyers and sellers were awaiting the new buying trends from the abattoirs before taking any further decisions. It is also obvious that the minds of the tanners are already on the summer break and not on the serious need for raw material supplies. Due to seasonal factors, the interest’s gravity point is gradually moving towards Asia. This certainly applies to those with material that fits the production framework over there. Hardly any exciting news can be found about the general leather business.                                 

Some question marks are raised over the huge gap in the cow market between the market logic and the hard facts. There are constant reports regarding large stocks of cows in Europe, which is said to be the reason for the large price gap between the US and European prices. We think that the majority of these stocks are not in the hands of the processors and packers, but might still be coming from a cocktail of various origins struggling to find a home. This is further reinforced by a number of attractive offers mainly from the Eastern bloc. There may still be one or two speculative positions of regular material around but it will not be enough to make a significant enough impression on the market to justify the large gap between the two origins. Providing the prices quoted from the USA are correct and represent the trading level of the market, we should see significantly more interest in European material to quickly substitute or compliment supplies. However, we have failed to observe much interest but for regular buyers. 

The kill: While the kill last week was much higher than expected, we did see it drop again last week. However, the low average weights of the season are much more worrying than that. Perhaps not totally unusual, it does not help calculations that don’t fit well into the market demand. 

What do we expect? This week the market has to decide how it is finally going to digest the changes in currency relations. While in the past the weekly adjustments were within moderate shifts, the recent drop in the value of the euro has changed the equation significantly. Eventually tanners worldwide will make new calculations, and euro-based calculations will offer more attractive deals, proving even better with the euro extending its losses. Despite the limited market activity, the present currency situation has received pressure from the European market but we doubt the momentum is strong enough to allow the market to rise. This would require another round of strong sales.

Type	Weight range	Avg. green weight	Salted weight	Avg. weight salted	Price per kg green weight	Trend
Ox/heifers	15/24.5 kg	22.0/23.5 kg	13/22 kg	20/21 kg	€ 1.55	Firmish
	25/29.5 kg	27.5/28.5 kg	22/27 kg	25/26 kg	€ 1.35	Steady
Dairy cows	15/24.5 kg	22.5/23.5 kg	13/22 kg	20/21 kg	€ 1.45	Solid
	25/29.5 kg	27.5/28.5 kg	22/27 kg	25/26 kg	€ 1.28	Solid
	30/+      kg	33.5/35.5 kg	27/+   kg	29/31 kg	€ 1.16	Solid
Bulls	25/29.5 kg	27.5/28.5 kg	22/ 27 kg	25/26 kg	Share this story: Leatherbiz.com cannot be held responsible for content if the language setting is changed from English. The translations provided by Google Translate are automated and therefore might not be accurate and may contain incorrect, offensive or misleading language. We offer this facility as a guide only.