What happened this week: This, and next week, might be the peak of the holiday season in Europe. Most of the tanners in Northern Europe are still on holiday and those from Southern Europe are finally starting theirs. This situation has brought European activity almost down to zero and, apart from a few scattered members of the trade, there is hardly anyone left at their desk.

Consequently, we could not trace any interest or activity in our part of the world and, considering the real crisis of the trade, anything other outcome would have come as a surprise. With most of the Italians departed as well, we are now even more eager than ever before to consider what we can expect when tanners return from their holidays and what their decisions will be.

There must be a really impressive volume of goods stuck in the port and a number of tanners have not paid for overseas shipment documents that have arrived into Italian ports. It is not clear whether this is actually a money problem, or simply a lack of orders and the chance to renegotiate prices for expensive contracts. Well, we will find out when the tanners return and it is most likely that the final shoot-out will take place at the beginning of September. After that the victims will be counted.

With all the bad news from the market, plus the existing problems of the large upholstery makers in Italy, not a lot of good can be expected. In the meantime, the chronic optimists have also lost most of their faith and, day by day, more and more people are admitting problems with claims and late payments from that area. The news from other European markets is not any better, but their size and influence on the market is far less of course.

So, all the emphasis was again placed on the overseas markets and they were not fully disappointing. As long as we talk shoe uppers, tanner interest still exists and sales can be achieved. In the Middle East and Asia, a number of tanners are still seeing some appeal for European male hides and the firmer US$ helped to book one or two sales to at least keep some product moving this week. The total volume was less than in previous weeks but, considering that we are at the end of July, one shouldn’t  complain. We can still remember times when less activity took place at this time of the year.

Dairy cows still remain the dramatic force, and, with Asia not buying for well-known reasons, one only has to bother about a few orders from Italy where buyers are mainly testing how weak the sellers are rather than seriously covering any raw material needs. Under these conditions, we would not call the reports about sales and prices for dairy cows truly reliable as the sales are rather coincidental and whether the trucks are really delivered in the end, and much more importantly, whether they are paid, remains to be seen.

The end of August is going to become not only critical, but also a decisive month and it is really going to be interesting to see how the situation will finally convert at the abattoir doors and how long many butchers and processors will continue to deny the realities of the situation. Looking at the other markets and the situation, nobody should complain if dairy cows prices still need a 20% correction at the abattoirs.

The kill: The kill is still reasonably steady for this time of year, but it is still low, as are the weights. In about three weeks from now we should expect a moderate increase with the holidays in our area slowly coming to an end.

What do we expect: We repeat our concern about cowhides. There is little to stop the present problem. However, it is also true that at some stage the price correction will be sufficient and tanners will replenish their inventory. This might come late, but it will happen and buying cheap hides has never been a mistake. However, the structural crisis is not over yet and a lot will depend on whether the delayed price correction at the abattoirs finally takes place and market realities are actually accepted.

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