I am seriously concerned about the effect China is having on cashmere markets from all origins.

Chinese sweater exporters are bust producing garments for sale through large retail chains and supermarkets worldwide at artificially low prices. As a result they are forced to source raw material from cheaper origins such as Mongolia, Iran and Afghanistan which, in effect, increases the price at these origins, making traditional manufacturing in western countries difficult, if not impossible.

We saw a similar situation several years ago in Outer Mongolia when China moved in and bought all the raw material, thus starving domestic manufacturers of stock and forcing them out of business, which then eliminates competition and allows China to dictate the price of raw material.

For many years China has been seeking worldwide domination of the cashmere market and production of garments. Their recent joining of the World Trade Organisation (WTO) has made this easier as Europe and America have removed all import quotas on number of garment imports and there are no restrictive import taxes. On the other hand Chinese exporters still receive a substantial rebate (11% for yarn and 13% for garments) from their government to encourage the generation of foreign currency which allows them to under-cut any competitor. They can generally sell yarn at the same price as dehaired cashmere and garments at the same price as yarn produced by overseas spinners.

If China is allowed to continue dominating cashmere markets all other manufacturers will be forced to close, resulting in many job losses and further loss of added value in other countries.