- December 31, 2009
Cashmere prices may go down some day thanks to Cashmere Market Days, a trade fair organized by Nathan Associates’ Mongolia Competitiveness Initiative and the Gobi Regional Economic Growth Initiative. Initiated in June 2001, the fair will be repeated in May and June, 2002.
Held in Dalanzadgad in the southern Gobi and in Altai City in the west, the first fair is estimated to have resulted in the direct sale of more than 150 tons of cashmere from herders or herder cooperatives to Mongolian cashmere companies. Herders’ additional income from the event was estimated at between US$750,000 and $1 million. And price premiums were on average 20 to 25 percent above market prices in rural areas and topped prices being offered in Ulaanbaatar at the factory gate.
Solving Traditional Marketing Problems
Cashmere Market Days brings herders face to face with processors. The fair’s organizers believe that if herders can get full value for their product they will be more likely to be concerned with quality. Processors will be able to reduce procurement costs and obtain a better product. And both parties can begin establishing business relationships that will encourage herders to produce cashmere that meets processor requirements.
Making Direct Sales work at Cashmere Market Days
Fair organizers first ask herders to carefully comb their goats, keeping colors and grades separated and to work with other families to assemble uniform lots of no less than 80 kilograms. They then sort, grade, bale, and weigh the cashmere and give herders certificates attesting to the quality and quantity of their cashmere. Certification helps herders negotiate prices and may help them obtain credit and negotiate future sales of cashmere on contract.
Processing companies provide teams of professional sorters and graders who evaluate the color, micron, and cleanliness of herders cashmere. After evaluation, the cashmere is baled and recoded. The processors are confident in the accuracy of the grading because their own sorters participate, and herders feel secure that their products are not being downgraded to lower prices.
Processors provide bags, baling material, presses, and cash awards for prize-winning bales. Through in-house laboratories, some also provide herders and herder cooperatives with low-cost fiber testing of their samples. Nathan’s Competitiveness Initiative blind-codes the samples to ensure fairness and the test results help herders identify the quality of their cashmere and ways to improve its marketability and value.
Market Days is organized by Michelle Morgan, Nathan Associates Chief of Party for the Competitiveness Initiative, and David Dyer, Land O Lakes Agricultural Program Director for The Gobi Regional Economic Growth Initiative, managed by Mercy Corps International. Both projects are funded by the United States Agency for International Development.
This year’s trade fair will involve the sale of camel wool, reinforce the market price incentives for quality, and provide training in market functions and financial services.
Competitiveness In Mongolia