CASHMERE

CHINA

Following the dramatic dip in greasy prices in 2008/9 many goats were slaughtered due to cost of winter fuel to comply with government grazing restrictions.  Combined with animal fatalities during 2009/10 severe winter, the 2010 clip is much lower than anticipated (down 50% in many areas).  Strong domestic retail sales have pushed up prices 10-15% in November.  There is little quantity of good quality available and we expect prices to continue rising until the 2011 clip becomes available.  Long best white could possibly be US$150 and short types below 30mm already exceed US$100.

MONGOLIA

2010 clip is down 35-40% from 2009, from approx. 7800 tons to 5000 tons due to severe winter 09/10.  Most greasy was bought by Chinese and exported to China after the Mongolian government withdrew export tax on greasy and scoured cashmere.  There is little or no fibre in the hands of herdsmen or Mongolian dehairers.  Prices have increased dramatically due to Chinese demand and look set to continue rising.

Despite high greasy prices (Tug 50-60,000 depending on quality = USD40-48 =

USD14-16 per goat per year at 300 gm average).  Due to increased Chinese wealth they are eating better and meat prices have soared to USD135 for an average 30 kg goat.  Herdsmen are already slaughtering goats before the December tax per head of livestock and to avoid further fatalities during another predicted severe weather.

The 2011 clip is expected to be down another 20% so prices will not fall in the near future.

AFGHANISTAN / IRAN

The Chinese have been very active in Afghanistan / Iran to make up for shortages and price increases of Chinese and Mongolian cashmere.  Prices have increased 20% since late summer and there is very little greasy available until the new clip.

CAMELHAIR / YAK

Demand and prices increase as manufacturers look for cheaper alternatives to cashmere.  Availability is still reasonable.

ANGORA

Prices have also shot up during recent weeks.  Super Grade is now around USD40.

CONCLUSION

China is definitely controlling commodity prices now and, the huge increase in their domestic demand is creating shortages worldwide.  It seems we are moving into a new pricing structure and western manufacturers will have to live with higher prices for the foreseeable future.