CHINA

Prices increased over the summer months mainly due to domestic demand.  Now that the domestic season has finished prices have leveled off, slightly below last year’s level.  The Chinese clip is now estimated at 10-12 million kgs greasy per year and availability is generally good.  However fibre diameter is increasing due to cross breeding by herdsmen to achieve higher yields.

New camel and Yak clips are now available and prices remain around last year’s levels.

MONGOLIA:

New clip prices almost halved in April due to low demand and a collapse of the Mongolian Tugrig against US dollar.  This prompted frantic buying activity (mainly by the Chinese) in April/May/June and prices rose rapidly until August.  They have now leveled off but there is little or no good quality material available at origin.  Prices are still attractive compared to last year and other origins.  There is likely to be a shortage over the season and prices should firm up next year until the new clip arrives in March/April.

Annual greasy production is now estimated at 6 million kgs.

 

AFGHANISTAN / IRAN

Prices never really fell earlier in the year and remained expensive compared to Mongolian.  There has been very little demand from Europe but the Chinese have been buying.  Prices have increased 10-15% over the summer and very little fibre remains in herdsmen’s hands.  Afghan clip approximately 1.5 million kgs;  Iran 1-2 million kgs.

 

CONCLUSION

Higher prices are not helping market conditions and we expect business to remain difficult over the winter season.

The Chinese have driven up prices and still seem to under-cut spinners and manufacturers in Europe mainly due to the export rebate from the Chinese government (13% on yarn and 15% on cloth and garments).  These subsidies contravene WTO regulations and will destroy cashmere manufacturing in the west, if not tackled.  The CCMI have drawn these rebates to the attention of the US government although we can expect little help from them due to the small level of cashmere processing remaining in the USA.  We could possibly hope for more action from the EU government if anyone can bring the issue to the attention of MP’s at local, national or European level.

For and on behalf of

Cashmere Fibres International Ltd

 

 

David M Lee  –  16 November 2009