Another week comes to an end and it remains the case that business and sales drag along from day to day. The fact remains that we are still far from normal. From meat production to the sale of finished products, somehow production has to be maintained, but with very few exceptions, things are simply not running normally and smoothly anywhere. Everyone is struggling with individual specific problems and in the leather industry the different levels of production and sales are not running in sync at all. While individual business areas – and here it is always the better qualities – are still operating satisfactorily, others have almost come to a standstill. Now it is not a special realisation that the production of leather just unfortunately cannot be concentrated exclusively on individual articles. A tannery has to manage all selections. We therefore hear from many companies that this imbalance, which has existed for a long time already, is getting worse and worse and that the share of  rational and demand-oriented production is therefore shrinking more and more, whereas the stocks of articles not in demand are swelling increasingly. The hope for a quick and fundamental improvement is fading from week to week. If this problem were limited exclusively to the leather industry, one could remain a little more relaxed. Unfortunately, similar or the same problems seem to affect the next stages in the chain up to the consumer. The leather industry is always familiar with such difficulties and there have also been periods in the past when either the better or the worse

products experienced sales problems. However, this time is obviously much more profound and while in the past there was always confidence that an appropriate solution would be found to the problem in the next season, it is now rather hopeless due to lack of demand and product ideas. Even if one does not like to talk about it, it is becoming increasingly clear that it will be difficult to believe in quick and profound solutions for the current season and the coming months. The follow-up problem is then always quickly financing, which could become a really big burden in the current environment in Europe. Business this week was again rather sporadic and random. Most of the demand came from Asia and especially from China you can see from almost every enquiry that the decision whether and what to buy is less influenced by leather demand and much more by the possibilities of sales and revenues in the collagen and gelatine sector. This led to a demand for essentially either very cheap, or very heavy and good quality goods. Until the middle of the week, one or two deals could be made, but the closer the weekend came, the more the customers and their interest withdrew again. It seems that the current pandemic situation in China is playing a major role in this as well.

The kill

Despite the change in weather, this had little effect on meat production. One gets the impression that the situation with beef is similar to that of leather, only with the opposite indicator. Cheaper cuts of meat and processed meat still sell relatively well, but high-grade cuts and higher-priced cuts of meat sell correspondingly worse. Here, too, the corresponding stockpiles build up, preventing full production, which would actually be normal for this time of year.

What do we expect

In the coming days and weeks, decisions must and will be made about prices and the volume of sales until the end of the year. At the moment, the market is driven less by active business and more by political decisions. This means that both volumes and prices do not really reflect the real situation. We expect slightly decreasing prices and a hard fight for sufficient supply volumes until the end of the year and a difficult discussion about the interruption over the Christmas period.