This week, all eyes were on the trade fair in Milan. Whoever could and wanted to travel to Italy either to actively participate as an exhibitor, to find out about the new trends as a leather buyer or just to get an overview of the mood. In the end, everyone likes to interpret the impressions in such a way that it supports the desired opinion and therefore the comments and views were quite different. For us, the fair confirmed what we think we have been able to recognise in the market for some time. As at the last two fairs, Lineapelle is successful in what it stands for. For the proof that leather is a very beautiful, valuable and creative material and that it can still impress a really large number of people with its beauty and properties. It becomes difficult where leather is an industrial manufacturing material and cannot really be distinguished from its alternatives. It is only for this sector that the fair is not organised, nor does it have any real influence on developments there. For those who produce or seek the beautiful and the special, the fair was certainly a positive event. Nevertheless, it remains the case that this is only the smaller part of the leather industry in which the business development is clearly more positive than in the mass markets. This certainly also explains why the views are very different. As far as our business is concerned, the reflex of most suppliers to immediately take the lower kill as an opportunity to set the asking prices upwards was as intact as ever in the past. No one disputes that most raw material prices are historically low and are not a

major problem for tanners who have sufficient orders at the moment. However, the constancy and stable markets of the last few months have not harmed anyone and ensured that there was still a relatively regular flow of goods for European hides. One can certainly have very different opinions about the fact that we now want to tempt fate and test how demand reacts with higher prices just before the phase of the lower production season. One thing could be said for sure at the end of the fair, customers were even more thin-skinned about rising commodity prices than they are already in normal times. We don’t think that, except for the specialities, many people were able to agree and in most cases, including ours, they postponed the decision on the next purchases at higher prices for the time being. So, if one was not prepared to sell at unchanged prices, then one had to wait and that was also true for us. Of course, the only exceptions were again the specialities, where the price negotiations were not friendlier but at least in the end somewhat easier and with a positive result. In any case, it is regrettable that the equilibrium in which the market had been for some time has been unnecessarily disturbed for the time being.

The kill

This week, the kill was very low. In the meat industry, too, the parameters from the farm to the slaughter industry to the supermarkets do not fit together. Quantities, prices, stocks, nothing is really going according to plan and of course that doesn’t help in the current situation. In the coming week, production will slowly increase again.

What do we expect

The market is now in turmoil and the timing is very bad. The geopolitical situation is unstable, inflation is not yet under control and stocks of finished goods are still too high in many cases. Consumers are still holding back and whether China will trigger the big boom is still written in the stars, but seems unlikely at the moment. All these are not good prerequisites for a solid market development. Next week, the first step will be to reach an agreement on prices for March. This will not be easy and certainly no one will be really satisfied with the result, which will not improve the mood.