There were two weeks this week… One until the Russian troops entered Ukraine and one afterwards. Before that, all eyes were on the trade fair in Milan and hardly any attention was paid to geopolitics. Hardly anyone actually expected a real and genuine war in Europe. Let’s stay with the fair in Milan for now. Although it may not sound very nice, to be honest we find this fair rather pleasant and probably more effective without the big crowds from overseas. Many people see the fair as a general indicator of the situation in the leather industry, but in our opinion this is not true. It is and remains a trade fair for the fashionable and creative sector, which is largely determined by Italy and France in Europe. All other exhibitors are of course also welcome and of course all visitors. Nevertheless, the fair in Milan really only determines the sector described above. Here the mood was absolutely positive, at least until Wednesday evening. There are many problems with the rising costs of chemicals and energy and the pricing of leather for the next seasons. Nevertheless, there was hardly a tanner in the fashion sector who basically mentioned any negative outlook regarding the interest of his clients. Price is and always will be an issue, but for now it is very positive to note that demand for luxury and high quality leather goods is definitely good. However, as a large part could possibly react to the war and its consequences, from Thursday morning situation was certainly not so clear anymore. Too many parameters may shift in the coming months leading to a complete reassessment of the situation. The second major area of discussion was the automotive sector, where suppliers and the slaughter industry continued to use low slaughter as a selling point and raised the asking prices

significantly. According to our assessment, no tanners were willing to follow these ideas except for special individual cases. Thus, as in the previous September, we went home again with very divergent ideas. After the invasion, news began to accumulate that the production of the automobile industry could also be considerably affected. So, we will have to wait and see over the next few days whether there might not be a disruption in demand and that would of course have a very rapid impact on the ambitious demand prices. We will know more next week. With the normal cow hides, the situation was actually clarified relatively quickly and easily. As always, one approaches the negotiations optimistically, but it very quickly turned out that the significantly increased demand prices were not so easy to implement here either. In this case, agreement was actually reached relatively quickly and the mark-ups remained very moderate in relation to the previous month. Sales activity was actually limited until Wednesday and those who had found a buyer by then were able to conclude calfskins and also the current programmes at somewhat higher prices for March. However, many negotiations are still open and we will only see next week what effect the customers in Asia and the negotiations in Europe will have on the market.

The kill

There was very little change in the kill this week. Next week is carnival week and that usually means that volumes will drop again a little. However, at the end of each week we have seen more or less the same numbers since the beginning of January without any major changes.