A turbulent week is coming to an end. However, the turbulence came less from daily trading and more from a flood of emails from China on Wednesday reporting that import licences for German and Spanish hides were no longer being issued at one port. This caused a great deal of unrest because the information was very fragmentary and not very meaningful. It is still not one hundred percent clear what the real and actual situation really is. As it seems, it is only about shipments that are either on their way or have already arrived in port without a valid import licence which should already be granted prior to shipment. Final clarity could not be achieved by the end of the week today. So at least administrative matters are providing some variety, if the trading activities are already not providing any great entertainment. Moreover, market activity was once again below average this week. In Europe, people are now preparing for the next deals for the period until the holidays and this is likely to be another very difficult and possibly not very friendly conversation. The slaughter industry is insisting on unchanged prices and whatever policy may be behind this, there are always market participants who do not have the necessary clarity or it is the marketing arms of the slaughter companies that do not want to accept price adjustments for their own strategic and political reasons. Ultimately, there is not much that can be done about this, because the first owner

decides on the supply in terms of quantity and price. However, it will probably lead to the tanners looking for other alternatives or even – as many are already announcing – simply reducing their production again as much as possible. A large part of the goods is not needed at the moment and a large part of the production only serves to maintain a certain minimum quantity, which is simply necessary for the operation of a leather factory. However, many factories cannot reduce much further if they do not want to lose qualified workers and do not want to fall below the minimum capacity utilisation of the waste water plants. This path already a few weeks before the summer holiday, the length of which is still the subject of much debate, is not particularly positive news either. One thing can be said with certainty at the moment, it is by no means the price of the raw material that determines the demand for leather. So, we continue to wait for the great unknown to trigger the surge in leather demand without having met anyone in recent months who has presented us with an interesting idea of how, why and when this might happen and who is going to trigger this.

The kill

The price for live cattle has stabilised somewhat at the moment. Slaughterhouses and food retailers report a somewhat more balanced market situation. The supermarkets‘ special offers, however, speak a somewhat different language – one does not get the impression that there has been a sustained improvement at the moment. For the kill it still means relatively little at the moment and the weekly numbers do not vary very much. Basically, it seems that the slaughterhouses are concentrating on a reduction wherever possible. Probably with the intention of being able to lower the prices for live cattle and at the same time strengthen the supply situation. Well, it’s summer and nothing has ever really changed much until the end of the holiday season.

What do we expect

Even though we will still not win any popularity award, we remain very sceptical. There are too many facts that simply do not fit together and every day one gets the impression that some people are trying to turn wishes into reality with a gun in the hand. But first of all, wishes and reality are becoming more and more distant from each other. The further away, the more difficult and protracted the rapprochement. The problems lie much deeper than the question of whether skins are more expensive or cheaper, and much would already be gained by addressing the important problems that will take a long time to solve.  If this is not done, price may quickly become irrelevant in the leather chain for many hides. With a common sense, it would be relatively easy to manage and control the problem, but as long as the ‚deal-of-the-day‘ is more important than the overall situation and the future, it is likely to remain unsatisfactory for the majority concerned.