Cashmere may seem like an exotic fabric to some, but it is simply the goat equivalent of what wool is to sheep. This fur is the downy, soft undercoat that grows to its maximum length by the coldest months of the winter. Any goat can provide cashmere. Some goats, especially in Mongolia, are specifically bred to produce this high-quality fur.
Length, crimping, and diameter are the three most important qualities which are evaluated when cashmere is shorn. It must be at least 1.25 inches in length, with an average diameter less than 19 microns, to qualify as cashmere. In comparison, human hairs can be up to 181 microns in diameter.
For the 2012 year, which is the last year herd population statistics have been published by the local wool and cashmere associated in Mongolia, there were over 17 million goats which were counted as part of the industry. The industry supports a total capacity of 7,350 tons of washing, 4,110 tons of combing, and 1,400 tons of spinning per year.
50% of all cashmere company activities involve washing. Combing is responsible for 18% of the activities, while knitting encompasses 14% of company activities.
Important Cashmere Industry Statistics
#1. Mongolian cashmere garment exports created revenues of $9.6 million in 2016. That figure is up 196% from what the export market generated in 2009. (Mongolia International Capital Corporation)
#2. 82% of the cashmere organizations that are registered with the commodities exchange in Mongolia only process cashmere – no other fabrics, garments, or textiles. (Mongolia International Capital Corporation)
#3. Over 8,900 tons of cashmere was produced in Mongolia in 2015, with more than 70% of the washed, low-value processed cashmere being exported. (Mongolia International Capital Corporation)
#4. Goat livestock populations have increased by almost 70% since 2006 to support the growing cashmere industry in Mongolia. Older goats have also started being shorn for their fur, which has led to an increase in processing waste of more than 20%. (Mongolia International Capital Corporation)
#5. Traditionally, Mongolia has provided 25% of the raw cashmere for the global industry. Gobi holds the largest market share, with 66% of the total market. Goyo follows in second at 13%, with Cashmere Holding in third at 9%. (Mongolia International Capital Corporation)
#6. The raw or greasy cashmere output price ranges from $25 to $30 per kg, which is only 10% lower than what the sorting output price happens to be. In comparison, knitting cashmere produces an output price of up to $150 per kg, which translates to $40 per kg in value added. (Mongolia International Capital Corporation)
#7. China receives the most cashmere from the export market, with over 412.3 tons purchased. Italy came in second, with 334 tons purchased. Great Britain followed in third, with 191 tons purchased. No other country purchased more than 20 tons for the year. (Mongolian Wool and Cashmere Association)
#8. There are currently 15 factories producing manufactured goods for the cashmere industry in Mongolia. (Mongolian Wool and Cashmere Association)
#9. 46 major knitting factories, along with 150 small operations, and 23 elementary factories also help to provide employment and support for the local industry. (Mongolian Wool and Cashmere Association)
#10. About 8,800 people are employed in the manufacturing sector of the cashmere industry in Mongolia, along with numerous goat herders, farmers, and agricultural workers who help to produce the cashmere in the first place. (Mongolian Wool and Cashmere Association)
#11. China is believed to produce up to 65% of the world market of cashmere each year, with total demand levels often reaching 12,000 tons. With China and Mongolia combined, they share about 90% of the total cashmere trade globally. (Berkshire Publishing Group)
#12. It takes a goat 4 years to produce enough hair to make just one sweater, with the fur hand-combed to ensure its overall quality. (Berkshire Publishing Group)
#13. There are more than 2,000 companies in China that are processing cashmere. These companies use more than 90% of the raw cashmere that is produced in the world, making it almost impossible for raw cashmere to be purchased from China. (Berkshire Publishing Group)
#14. Up to 50% of the raw cashmere that is produced in Mongolia each year, up to 3,000 tons, is smuggled across the border to China duty-free. (Berkshire Publishing Group)
#15. Several export bans were implemented in Mongolia in 2018 to stop raw cashmere exports. With targeted loan financing for companies to get involved in the industry, the country now has the capacity to wash up to 60% of all domestic cashmere. (Mongolia International Capital Corporation)
#16. Goats in Kyrgyzstan are sometimes favored for their cashmere because they produce up to 26% down compared to their outer hair. That means one goat can produce up to 150g of combed cashmere, which is double that of goats in other regions. (FAO)
#17. For many goat farmers producing cashmere, their main source of income comes from the selling of live animals. That makes the industry a secondary concern, especially for Kyrgyz farmers. Raw cashmere prices are usually $10 to $15 per kg higher in China than they are in other parts of the world. (FAO)
Cashmere Industry Trends and Analysis
In 1997, China reported that it had produced 10,000 tons of raw cashmere. It also reported imports of 800 tons of raw cashmere from Mongolia, while reporting zero exports of raw cashmere. Even though this data is decades old, there is still relevance because the market remains relatively unchanged. The only difference is an increase in the amount of cashmere being produced in Mongolia.
The sharp increases in goat farming for cashmere and agricultural products put pressure on local pastures, especially in Mongolia. The quality of grass has degraded since 1998, which has reduced the quality of the cashmere being produced. It has also encouraged desertification in heavily farmed regions. China has even implemented restrictions on goat herd sizes to reduce this environmental issue, though with little success.
In 1989, the world price of raw cashmere was $60 per kg. In 1998, it dropped as low as $15 per kg. Today’s pricing is double of what it was in 1998, but it is still 50% of its record highs. With China continuing to produce affordable cashmere finished products to export, the pricing and structure of the market is not expected to shift in the next 5 to 10 years.
With cashmere, expect more of the same, with slowly rising global demand in strong economies.
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