What happened this week: We have now definitely arrived at the low season of the summer. Business and sales have not come to a complete standstill, but trading is becoming more and more incidental at the moment. One or two sales of dairy cows to China can be found, but nothing in any significant volume. One good thing is that letters of credit are still coming in on time and hardly any delays are being reported. This confirms the opinion of many other market members that various traders might have sold short and are now finding it difficult to cover and to ship according to the agreed shipping schedules. Consequently, buyers are offering letters of credit to sources that they assume can meet their shipping times. Apart from the patchy sales to the Orient, some latecomers in Europe could also be found. However, here the interest was less for dairy cows, and much more for ox/ heifers which were requested by various destinations.

It was pretty hard to meet asking levels, but in the end various interested parties had to accept and so some limited quantities were booked. The only other interest in hides worth mentioning once again came from those buyers who have already been looking for cheap and economical light weight material for many weeks. Existing stocks are now starting to become exhausted and it will be difficult to replenish them at the same rate that tanners are looking to buy this kind of material. As a consequence prices went higher and were eventually accepted within the frame of plus 10%. It is becoming more and more

obvious that a lot of this material is finally ending up in the South of China where it is tanned and selected before being shipped for various finishing productions around the globe. It will be very interesting to see if this particular interest will carry on into the next season. The only other really interesting development this week was the increasing interest for sheep and lamb skins. Clearly it is once again just speculative activity from the usual buyers, in particular from Turkey, where cash buyers are trying to find sellers willing to sell at bargain prices. It seems that there are still a number of traders with stocks and insufficient storage capacity. Plenty of rumours are circulating around reporting trades around $2 per piece, no matter whether it is sheep or lamb. We doubt that there are still large volumes left and it is going to be interesting to see what happens when the production season for garment leather starts in mid- August. It is pretty obvious that tanners are not buying yet, but wholesalers and traders are starting to build cheap inventories. We have seen this attitude over the last few years, when speculation has failed, but the main difference this year is that tanners do not have large inventories and the price level is not as high as it used to be.

The kill: Nothing really new to report on the kill and the beef consumption. The next two to three weeks are the peak holiday season with almost the whole of the country on holiday. As a consequence, anything other than a continuation of the present levels would come as a surprise.

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