According to industrial sources, cashmere output in 2008 is likely to exceed 80,000 tons and in contrast to this the demand for the same will remain as low as 40,000 tons. A contravention in demand and supply chain will therefore be a natural phenomenon resulting in declining prices for the raw material.
On the other hand this excessive supply may not even be controlled because an increase in the demand for mutton in the Chinese market would prevent the number of the herd from dropping.
Statistics reveal that starting from 2002, world consumption of cashmere is increasing by 15 percent every year. This shows that a persistent rise in the production of cashmere coupled with sliding demand will keep the prices low and this plummeting trend will continue in the future as well. A drop of 300,000 yuan per ton is predicted for the coming 2-3 years.