Market Report 19.01.2024

What happened this week

In our regions, the weather and the farmers’ strikes were actually more important than business this week. In any case, it had more influence on activities than the simple question of supply and demand. In some cases, transport was significantly affected by the weather conditions. Whether the farmers’ protests actually had an influence on the procurement of animals and the kill is rather doubtful. However, international logistics are also becoming increasingly important. It is not only the costs that are rising, but it is now also becoming clear that not only the duration of the voyages around the Cape of Good Hope are correspondingly longer, but that overall it will also have a strong influence on the handling in the harbours and the availability of empty containers. Although the situation is very different from the difficulties during the coronavirus pandemic, the sum total of possible influences and restrictions may well lead to significant disruptions again. General activity on our markets remained at a very quiet level, which is understandable for the time of year. The various trade fairs were also unable to provide any real positive or negative impetus. In any case, the cold and snowy weather means that there will not be another season in which winter shoes are unsaleable. The furniture fairs showed relatively little leather and textiles tended to dominate. If you do see leather, then it is special items and high-quality leather and furniture. There is not much business optimism coming out of Germany at the moment. The country seems paralysed, groaning under bureaucratic obstacles and a completely unclear political future. EU legislation is adding to this with a wide range of new regulations that are difficult to understand. From today’s perspective, it is difficult to judge whether things will be much better in other regions, as there is a feeling that the euphoria in many other countries is also clearly waning – at least for the moment. This means that there is simply a lack of clear impetus at the moment that would allow clear developments to be recognised. We will probably have to wait for the upcoming trade fairs in Milan and then Hong Kong before a clear picture for our business emerges again. One increasingly gets the impression that until then, everyone will continue to paint their own picture based on their own fantasies. This week’s business was accordingly quiet again. The price pressure on female goods from Asia continues to increase despite the existing interest and, in combination with rising transport costs, the corresponding pressure on revenues ex works is developing. It is noticeable that very fast deliveries are almost exclusively being requested at the moment. Offers for shipments in March are hardly being considered. In our opinion, there is a lot of talk and speculation about male goods. On the one side are the sellers, who point to the seasonal reduction in kills, and on the other side the leather industry, who point to the increased production costs and the general problems in automobile sales. Apart from minor discounts, prices have not changed much, but the volume was so low that price changes cannot be described as representative.

The kill

There have been no major or significant developments in kills. They are somewhat lower in line with the time of year and this is unlikely to change too much in the coming weeks. We continue to see a clear trend towards a reduction in the number of traditional male fattening cattle in favour of heifers in particular.

What do we expect

Perhaps we are lacking in imagination, but we do not see any drastic changes in the market situation for the coming week. In China, demand will probably decline slowly but surely, as most factories are now busy preparing for the Chinese New Year break. In Europe, the new negotiations are only due in the coming weeks – at least at the moment it does not look as if there will be any significant price changes. It is at least unlikely that there will be any price increases.