Chinese Taste for Cashmere Grows

on July 7 2011 | in Trends | by | with No Comments


Industry insiders call it “soft gold” and “diamond fiber”—and if those nicknames alone don’t bring you dreams of luxury and wealth, the name of the thing itself will: Cashmere. Produced from the wool of cashmere goats, the cashmere fiber has been a sign of wealth and luxury for millennia. And the perfect place to cultivate cashmere? Northern China.

Cold, dry winters in China’s Inner Mongolia cause cashmere goats to grow thick, warm coats, creating high yields for the Inner Mongolian cashmere industry. Chinese cashmere factories, many located in this northern province, produce between 75 and 80 percent of the global cashmere supply. This market share is worth between $770 million and $924 million (US dollars).

Although the majority of the produce of these factories is traditionally exported to affluent Western countries, increased individual affluence in China has correspondingly increased domestic demand for the fiber.

Fortunately for cashmere producers, increased Chinese demand has helped ease the effects of the Western recession. Last year, the number of Chinese-made cashmere sweater exports was only 12 million—down one-third from 2007 export figures.


Lower export rates have not adversely affected goat herders, though. Increased domestic demand, combined with a recently lean supply of raw cashmere due to husbandry-related issues, have made the price of raw cashmere skyrocket.

For goat-herder Meng Lounu, 77, and his family, the rising prices have brought fortune beyond their greatest expectations.

“Our standard of living gets better and better,” said Meng.

The family makes one million yuan per year selling raw cashmere to Inner Mongolian factories. Their increased revenue has allowed them to purchase a new truck and build several new cement houses for family members.

“Before, our life was bad,” said Meng. “Now it’s great. We can eat as much as we want—we make more and more money.”

While this burst has been a windfall for raw cashmere producers, cashmere factories are feeling the pinch. As the industry increases, more Chinese factories are turning to cashmere production. This new competition plus increased wool prices are hurting older cashmere factories’ profit margin.

But this struggle at the production level doesn’t directly affect Chinese consumers. In Beijing and Shanghai, 100,000 cashmere sweaters sell each year. Cashmere factory worker Wu Suqing can see why people want to buy the sweaters, too.

“It feels nice and is comfortable to wear,” Wu said.



image credit: hedgehog fibres

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