This week many were waiting to see if the Dubai fair would bring new insights into the markets. Even though only a few exhibitors and visitors from Europe had found their way to Dubai, the uncertainty continued here as well. As has been the case for months, many are trying to influence the markets in their favour. The news from the leather industry, on the other hand, was less encouraging. There was talk everywhere of reduced order backlogs, of delayed orders or orders that had not yet arrived and the fear that nothing fundamental in this will change in the coming months. At any rate, the mood among exhibitors and visitors was not particularly positive on balance. It is remarkable that more and more large leather factories, instead of using their capacities for their own production, prefer to offer the drums for contract work on the market. For the sake of completeness, however, it must also be mentioned that there are still and perhaps even increasingly interested parties who obviously have a better return for semi-finished products and lime splits than the tanners do for their finished leather production. Making sense of the operation would then mean, according to economic logic, that the value added in complete leather production today is lower than in separated and differentiated use. In addition to the question of whether this is actually the case, it must then also be discussed

whether there is actually a regulated and congruent outlet for the goods produced. Then the discussion immediately becomes interesting as to whether the many rumours about meanwhile considerable stocks, which are said to exist at least throughout Europe, are actually true. In any case, it is true that smoke is usually also a sign of fire. Hopes for a quick recovery in China are also fading from week to week. Our commodity is on average far too expensive for the market there, at least at the moment. Putting all the facts together, no one can deny that the signs of emerging problems are mounting from week to week. The turmoil in the financial sector and the never-ending political unrest are certainly not helping sentiment at all levels of the supply chain either. Relatively little has happened on the price front yet, but the next round of monthly negotiations will certainly not be a walk in the park. All suppliers in the world are trying to defend market prices by all means, but it will be very interesting to see how many and for how long stocks can be defended if they possibly continue to rise. Trading this week was also rather random and sporadic. With no major interesting offers coming out of Asia, sales were limited to single trades in Europe with only minor changes in prices.

The kill

The kill has recovered from the low levels and are now at very stable numbers. It can be observed that many animals stayed in the barn longer than desired and live cattle prices are currently falling significantly. Demand is still concentrated on the cheap cuts, while the prime cuts are still suffering from the reawakened price consciousness of consumers.

What do we expect

We can still contribute little to the market assessment and price development. We do not see supply and demand in equilibrium, but as long as sellers do not adjust their prices, as much will be sold as can be sold at the prices demanded. From our point of view, that is not enough at the moment and that is why a lot of goods find their way into all kinds of interim storage and prices will not change significantly. But you can clearly see that nervousness is increasing and confidence is decreasing.