What happened last week: Generally, this is not the best time of the year for writing market reports. If people are not already on holidays, they are preparing for them and very few have the hide market on their minds. Even Asian tanners are taking some kind of a break although some are using this time to travel to Europe either to visit their suppliers or to investigate other potentially more favourable sources. As far as business is concerned, activity was consequently pretty quiet. However, selling did not come to a standstill and we were impressed by the ongoing demand for light and economical hides. Most of this material is going either directly or via traders to the Far East and in particular to China.

Eventually some interest in dairy cows was noted but, at least in our case, sales volume remained reasonably limited. This may be our fault because we tried to compensate for the weakening dollar to obtain a fraction more for the hides. However, all attempts to raise prices for dairy cows failed. As far as other hides were concerned, we were not prepared to finalise the outstanding repeat contracts, either because our clients are on holidays or often simply because no decisions were made.

Since prices for male hides are up again at the abattoirs, higher selling prices were being asked for in the past months. Yet tanners, with a few exceptions, were not ready to follow this trend and failed to set much higher levels. It is once again quite difficult to get over the summer but, thanks to the regular shipments into the Orient, at least product flow is pretty steady. Apart from the reduced business activity, most talks are now focusing on the changes in the trading structure and on the market trend in the second half of the year. Here we can clearly find two fractions. One is very positive, based on the belief that the new firmer market prices trend is set for European hides, while the other uses more cautious arguments and take into account the massive pressure on finished leather prices and the abundant supply of hides in general.

We believe that in the next two to three months there will not be any real reason why the market should leave the narrow trading range on the upside. Although the outlook for the global economy seems to be reasonably positive, one cannot ignore the fact that the world is also faced with a reasonable amount of problems. The latest terrorist attacks are a good example, not to mention the oil prices, so the value of the dollar may plummet again. Time will tell but we would not make a clear bet on higher price levels before the third quarter. This excludes heavy bullhides.

The kill: the kill continues on low seasonal holiday levels. Fortunately, these are not as bad and they were several weeks ago. The ratio of males to females is mostly favouring the females at the moment but this does not pose a problem in view of the main European tanners’ bullhides being unavailable due to holidays.

What do we expect? We have to assume that some kind of agreement with the tanners for males will lead to higher prices. We doubt, however, that this is going to cover the increased levels at the abattoirs. The lower dollar rate will not improve dairy cow levels in Euro terms and lead to higher prices. Price levels set in the last two months based on the dollar still remain intact and the only unknown is the business volume.

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	Steady
	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	€ 1.52	Steady
	25/29.5 kg	27.5/28.5 kg	22/27 kg	25/26 kg	€ 1.32	Steady
	30/+      kg	33.5/35.5 kg	27/+   kg	29/31 kg	€ 1.16	Steady
Bulls	25/29.5 kg	27.5/28.5 kg	22/ 27 kg	25/26 kg	€ 1.60	Steady
	30/39.5 kg	36.0/37.0 kg	24/34 kg	31/33 kg	€ 1.50	Steady
	40/+      kg	45.0/48.0 kg	34/+   kg	38/40 kg	€ 1.42	Firmish
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