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Cashmere markets - Opportunities and challenges co-exist

20
Apr '09
When foreseeing the future of the cashmere market in 2009, it can be said that both, favorable and negative factors are intertwined and opportunities and challenges co-exist. Buyers across the globe are not able to draw up procurement plans, due to the uncertainty prevailing in the global markets due to the recessionary trends.

This has led to a reduced flow of orders in the last few months. According to industry experts, orders from markets in Europe and the United States are expected to fall by more than 30 percent this year with the whole industry concurring that, the cashmere industry has stepped into early winter, well in time before the actual onset of the season.

The slowdown has created a lot of supply and demand imbalances leading to an increased inventory of cashmere products. Market sources put the total inventory of cashmere goods at nearly 7,300 tons. This in turn is leading to enterprises shutting down production lines or altogether closing down their manufacturing units.

Considering that production in the new season will be considerably lower than that of last year, but a combined inventory of the previous season and production in the current season will significantly tilt the scales towards a increase in supply position, since demand is not expected to improve immediately.

The instability of exchange rates is also expected to play a major role in increasing the difficulties encountered by the cashmere exporting community. At present, although the RMB has stabilized against the U.S. dollar, the Euro and South Korean currency, Won, appreciated rapidly with a higher volatility.

Fibre2fashion News Desk - China


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