German Perspective - 19.1.16
20/01/2016
However, by the Tuesday morning everything changed. Asian tanners simply vanished. Trips, other commitments or silence began to dominate and it seems hide buyers have taken an early holiday.
Shipping delays and promises instead of facts were stories of the second half of last year. It seems many of the Chinese buyers have become wary about how the economy, government policy, the exchange rate and the global reaction to the terrorist bombings, such as in Istanbul and Jakarta, will affect business.
The European supply of cows for the upholstery market was affected; the other sectors had been quiet for some time.
The situation will begin get tricky, because the time window for selling to and obtain letters of credit from Asia is beginning to close. Many tanners have signalled they will take an extended break for the celebrations due to a lack of orders.
In Europe the situation is different. Premium automotive leather remains in demand and there has been a lower-than-expected slaughter of males.
Trading in Europe had been pretty quiet too, except those that operate outside ‘the market’.
Sales numbers have been below par but were boosted by the renewal of programme deals.
Prices were down on cows and steady to slightly softer for heavy bulls. Middle-weights heifers and bulls did not find any buyers at all.
The kill: The kill has recovered a bit, but is still below normal. Males are still missing in the product mix and the only good aspects are the weights, which are slowly reaching their seasonal highs. Rumours about incentives for farmers to reduce milk supply continue to swirl.
What we expect: We have a week or two left before Asia winds completely down and part of Europe is taking another short break due to carnivals and skiing breaks.
The global uncertainties are beginning to weigh heavily on many tanners and low orders, particularly for shoe leathers, are even more concerning. Consequently we have to expect a pretty quiet period ahead with little activity and rather coincidental price movements on the downside of the range.
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