style – David South Consulting

Cashmere is king but Mongolia still struggles to reap the benefit

By A. Delgermaa, Ger Magazine, Modern Life, Issue 2, May 12, 1999

A Mongolian cashmere designer once opined that Mongolians are lucky that most goats in the country are capable of producing fine cashmere. And while Chinese cashmere dominates the marketplace, Mongolian cashmere is by far the purest and finest.

About 30 cashmere companies contributes tens of millions of dollars a year to the country’s wealth (though nobody is quite sure how much because most cashmere sales go unreported to the government). But the revenue isn’t what it used to be due to problems in the domestic industry and a drop in the world price. Z. Ayur, chief secretariat of the Gobi company, thinks it doesn’t have to be that way.

“Unfortunately we lose half of our raw cashmere to China,” he says.”

“The Chinese buy cashmere at a high price, not depending on the quality. This means national manufacturers lack raw cashmere to process into garments.”

He thinks raw cashmere exports should be banned or subject to a duty of 100 to 150 per cent. Mongolia’s weak infrastructure plays a part as well. It is cheaper for herders to travel to the Chinese border with cashmere than to bring it to the capital, Ulaanbaatar. Often when they are at the border with China, they are subjected to some hard bargaining by Chinese brokers, who exploit the fact herders can’t afford to walk away empty handed.

Cashmere has always been considered a luxury and expensive. But in the past two years it has lost its fusty image as only for old people. Trendy designs have attracted a vast market of younger cashmere consumers. “I guess in the past it was dear and expensive and designs weren’t very appealing to the younger set,” thinks Gerelmaa, the chief designer of Gobi company.

The Gobi company is one of the few state enterprises left over from the socialist period that still makes money (and is due for privatization this year – a prime pick for foreign investors).

In 1972 the United Nations funded projects to experiment with starting a cashmere garment industry in Mongolia. This innovative thinking led to a joint Japanese-Mongolian venture in 1981 to start the first cashmere manufacturer, Gobi. These days it still produces one third of the country’s cashmere products.

Mongolian Wool and Cashmere Federation head Tsendmaa is optimistic about the drop in the world market price.” It will soon go back up again,” she says with confidence. “The reserve of cashmere in the world will run out soon. What happened with the drop in prices is typical of any industry when it overproduces.” What worries her most is the flood of Mongolian cashmere going to China, where Chinese workers process and knit the garments and reap the job benefits.

While cashmere is still known for its use in classic turtle, crew and v-neck jumpers, things have changed. “Before we mostly exported classic styles in off-white, brown, grey, black, bark, blue or dark red to Japan or Germany,” continues Tsendmaa. “Now Americans order more fashionable cashmere for the young. The designs of short jumpers that expose bare chests and waists are cheap to produce (less material) and suitable for young fashions.”

Italian, French or Belgian customers are fussier and demand greater variety in designs. These countries determine the vogue for cashmere wear and use the most high tech knitting technology.

Contemporary cashmere fashion in France or Italy can combine fur or silk. Colours have also been revamped, with the young going for light blue, light pink, snow white, off-white and light green. Italians and Americans like metal grey with rose or pink. Mixing up the colours in sporty stripes and lines is also popular.

Cashmere is very practical, warm and light. “It is not suitable for the office,” says Gerelmaa.” Cashmere wear is more suitable to wear for a night out or just for hanging out. But of course it is not for sport!”

Fashionable Mongolian cashmere is becoming a strong competitor to Chinese, Italian, Scottish or American cashmere. “The raw material is pure and the design is more fashionable.”

And a happy Gerelmaa likes the sound the cash register makes in Japan: “In Japan classic Mongolian style is sold for more than US $1,200 in the Takashimaya Store, in GINZA.”

Now if more of that kind of hard cash found its way back to Mongolia, the country would definitely be better off.