Canadian firm helps track Mongolian cashmere supply chain

January 21, 2020 - Canada

Canadian firm Convergence.tech has used blockchain to help Mongolian farmers track and certify cashmere as part of efforts to create a sustainable supply chain. A pilot project, launched in partnership with the United Nations Development Program (UNDP), employed Convergence’s traceability platform to test the creation of a sustainable and connected value chain.

It involved 70 herders and eight cooperatives in Mongolia. Cashmere, once considered a luxury fibre, is now an affordable commodity. As a result, grasslands in Mongolia are rapidly degrading, while herders face income instability and are often indebted to intermediaries for cash advances.

“The social impact created by underpaid farmers and an opaque supply chain is also a source of concern. With alarm bells ringing worldwide, particularly in the fashion industry, we need to respond urgently,” Convergence said in a blog post on its website.

The firm developed a mobile app as part of the pilot to allow herders in Mongolia to easily register cashmere bales. Bales and packing slips were also attached to high-frequency RFID tags.

“This technology helped to mitigate risks by eradicating the traditional manual processes that were time-consuming and prone to human error,” the tech firm said.

Around 471 kg of cashmere was tracked across three provinces in north-eastern Mongolia, from shearing at herders’ homes to a processing facility in Ulaanbaatar.

Apart from benefiting farmers, Convergence said the technology would allow buyers to identify the source of cashmere and help create a market that connects buyers interested in sustainability with sellers who follow sustainable practices.

Mongolia produces 40 per cent of cashmere globally, though the fibre accounts for less than 3.4 per cent of its exports, which are dominated by mining. In 2018, the Mongolian government launched the National Cashmere Programme to improve its competitiveness.