Market Report 29th May 2013

Today is my first day back in the office following 2 weeks travelling in China where things have become rather hectic and cashmere prices are increasing rapidly.

CHINA

According to supplier reports this year’s cashmere clip is down 25-35% on last year with high meat prices being the main culprit, currently US$11 per kilo, so herders receive approximately US$220 per goat for slaughter. At current prices they must sell cashmere for 8-10 years to achieve a similar return. Like all of us the big Chinese manufacturers were struggling to pass on recent prices and were waiting for the market to fall back during the summer months. In the meantime small and medium merchants/dehairers have been buying steadily and most fibre is now in their hands. Larger domestic manufacturers, Zhongyin and Erdos, have panicked and began buying heavily which has caused large price increases over the last few days. It is doubtful there is enough material remaining for their requirements and we expect price rises to continue. The Chinese domestic market for cashmere garments seems very active at prices similar to European levels or even higher.

The Chinese government continue to give generous grants or interest-free loans …read more