By S. Myagmarjav, Mongolian Sustainable Cashmere Platform Manager
The world cashmere market produces an average of 24,000 tons of cashmere a year, of which China alone supplies 50% (12 thousand tons), while Mongolia supplies 40% (9,6 thousand tons). Italy and the United Kingdom are the leaders in cashmere processing.
The sector has been hit hard by impacts of the Covid-19 pandemic; the cashmere market indicator has declined by 0.08-1.88 percent since January 29, 2020 (www.gschneider.com). Due to the COVID-19 lockdown, Mongolian borders were closed from the end of January until now, where travel was severely restricted and nobody could travel to Mongolia and Chinese traders did not have access. The shipments of scoured and dehaired cashmere to China and overseas have been delayed. All these factors have contributed to the price reduction from $38 per kilo in 2019 to 24-27/kg in 2020. Though, price is gone up again to $40,0 per kilo this year which is positive for the herders.
In addition, another positive thing is that the global demand for cashmere has been growing steadily across all sectors of the market, especially in Europe, where Italy and the UK are the main importers from China and Mongolia. The global cashmere clothing market is valued at 2790.3 million USD in 2020 is expected to reach 3658.1 million USD by the end of 2026, growing at 3.9% during 2021-2026.
Our country supplies 40% of raw cashmere, but only 12% of the market demand for cashmere products.
As of 2019, income from cashmere is primarily from raw cashmere. The above diagram shows that only over 24% of the total cashmere in Mongolia is made into final products locally.
The increase in the demand for cashmere products has led to an increase in the number of goats, which has led to overgrazing and pasture degradation. However, Mongolia lacks the capacity to fully benefit from the cashmere industry due to insufficient processing and value addition. This leads to the need to explore how to improve value adding processing in the country and increase access to international markets.
Regarding the rising demand for cashmere, private sector interest in the origin and sustainability of cashmere has been increasing too, as many are interested in understanding how their firms can increase the sourcing of sustainable and quality cashmere. Some companies see sustainable sourcing as a core issue to their business and would like to be leaders in the field, even if the majority of the market is still not requiring it.
Poor traceability affects the buyer’s confidence in the sourcing and quality of cashmere. Therefore, in order to answer above questions and to integrate solutions to complex environmental and social challenges, the UNDP initiated Mongolian Sustainable Cashmere Platform brings together cashmere sector actors in a joint collaborative value chain project named “Joint Traceability”.
The Collaborative Value Chain project commenced in April 2021 and the participating stakeholders are the Mongolian Wool and Cashmere Association (MWCA), Mongolian National Federation of Pasture User Groups (MNFPUG), Sustainable Fibre Alliance (SFA), and Ensuring Sustainability and Resilience of Green Landscapes in Mongolia (ENSURE) project implemented by UNDP Mongolia. Through the joint project, stakeholders source cashmere from Arkhangai, Bayankhongor, and Gobi-Altai provinces and explore current practices around sustainable cashmere traceability and certification initiatives demonstrating existing sustainability schemes by stakeholders such as Responsible Nomads, Mongolian Noble Fibre and SFA Sustainable Cashmere Standard. Within the pilot project, overall 30 tons of cashmere was sourced from 4 herder cooperatives and purchased by 6 national producers such as Cashmere Holding, Khanbogd Cashmere, MonItal, Schnieder, Goyol, Khatant International LLC etc.
The ‘Zalaa Jinst Silky Herd’ cooperative, based in Shinejinst soum in Bayankhongor province, is one of the many herder cooperatives working toward improving the livelihoods of herders while promoting sustainable ways of preparing cashmere and is participating in the pilot project. They supplied 3 tons of white cashmere with certified origin to “Khatant International” LLC this year which has been assessed and satisfied the requirements for bronze award of the SFA Clean Fibre Processing Code of Practice.
Ms. Oyunchimeg Galsan, head of the cooperative, highlighted that the cooperative conducts various trainings to its members and assesses herders’ practices of proper use of pasture as well as their sustainable way of cashmere preparation. She emphasized that herders’ attitude has increased toward quality over quantity of their goats. Last year, this cooperative had a reduction of 30% of their goats due to severe winter situation followed by drought. They slaughtered a significant number of animals and combined some with nutritional pellets which they shared with wild animals around their territory. The cooperative has also appointed Mr. Rentsendash, cooperative member, as a ranger last year, who has identified important biodiversity habitats in their local area under the UNDP ENSURE project and has conducted wildlife monitoring along with the Environmental department of the local government.
Such initiatives are making improvements in herding practices in a more regenerative way which will contribute to promoting sustainable cashmere production and decreasing excessive pressure on the land which contributes to overgrazing and land degradation.
Once parties undertake a complete value chain traceability, they will elaborate the good practices and analyse local capacity to meet the established requirements, identify areas to revise the concepts throughout the processes, and make recommendations towards improving further joint activities for the cashmere sector. Ultimately, the MSCP is aiming for stronger collaboration and partnerships of actors across the sector to tackle both land degradation in the country and contribute to the sustainable development ambitions of Mongolia.
 Mongolian Cashmere Sector current situation, 2020 МNCCI
 Market Assessment, 2019 UNDP