THIS summer, as always, the cashmere on offer in department stores and boutiques is mostly in ultra-thin "summer weight" tops. Come autumn, these usually are replaced by thick, luxuriant sweaters. But this year is shaping up to be different.
Merchants in China say that orders from Europe and North America have fallen by as much as 30 per cent. And the garments chosen by buyers from Western stores are noticeably skimpy, using less of the costly material.
"They are too small – half
the breast is outside the sweater," complained Wang Jie, the sales manager of the Inner Mongolia Dongda Cashmere Products Company.
Western consumers are buying fewer luxury goods, and demand for cashmere has plunged. The painful effects of this are being felt all the way to the nearly empty plateaus of Inner Mongolia, by goatherds and factory workers and owners.
Nicknamed the "diamond fibre" in Inner Mongolia, cashmere has changed the life of Yrthashun, an ethnic Mongolian herder. He lives in the tiny village of Baiyuanhua, a four-hour drive north of remote Hohhot.
As affluence spread worldwide in the 1990s, the middle classes began to wear cashmere and Yrthashun grew prosperous. As recently as a year ago, the cashmere combed from his flock of 100 thigh-high Kashmir goats sold for as much as £16.50 a pound, allowing Yrthashun to buy a small Chinese car.
But the price of cashmere has fallen by almost half since then and herders have been forced to sell many of their goats for meat.
"The end to goat herding after centuries is the most sorrowful thing I have ever had to face," Yrthashun said.
The problem is not just the collapse of the cashmere market, but also a government ban on Kashmir goats across much of Inner Mongolia for environmental reasons. Hungry goats with sharp hooves have denuded arid plateaus and broken up the soil, contributing to dust storms that fill the sky in Beijing and other cities in north-eastern China.
Yarn factories, which take cloud-soft wool from the goats and spin it for the sweater factories' looms, are suffering too. The Tiaje Cashmere Company's factory, a windowless hall the size of a football pitch, is filled with rows of machines that transform wool into yarn. But because business has shrunk, in recent months only a handful of workers have laboured in small pools of light in an otherwise dark expanse of shadowed machinery.
"I wish more of the lights were on; it's a bit dark," said Lin Siuchi, a soft-spoken 38-year-old, adjusting spools of cashmere being twisted into yarn.
The Tiaje Cashmere Company sells yarn to the nearby Inner Mongolia Harmony Industry and Trade Company, which knits sweaters and other cashmere garments for the Italian and North American markets.
But the factory has been operating at less than half of capacity for much of the last year. Employment at the factory fell to 50 early this year.
Inner Mongolia Harmony has orders for 20,000 sweaters so far this year, compared with 28,000 at this time last year. And general manager Muren, who like most Inner Mongolians uses only one name, differs with some economists, saying that he sees little sign of a nascent recovery in the US.
"Our American and European customers say the situation is terrible," he said.
Da Lisu, the merchandise manager of the rival Inner Mongolia Saihan Cashmere Products Company, said some cashmere companies had failed in recent months.
"I've had friends at companies that have gone bankrupt because US buyers have reneged on payments," said Da.
Wang, of the Dongda company, said that American buyers facing slower sales had become much quicker to reject shipments by complaining that the garments did not precisely match the original specifications.
"Our sizes are very accurate -– now they say, 'You made a mistake,'" he said.
As China tries to make up for falling exports of all sorts, many export industries are trying to sell more to the domestic market. But garments designed for the West frequently cannot be marketed in China, where demand is still weak for luxuries such as cashmere sweaters.
Indeed, the speed of the economic downturn last autumn left Inner Mongolia Dongda with 2,000 unsold sweaters piled in a warehouse.
In China, Wang said, "we can only sell the 'S' size".
Muren sees one small sign of hope in Inner Mongolia: The global recovery in commodities prices is starting to reach cashmere, as companies have started stockpiling raw cashmere again in anticipation of eventual better times, pushing up the price by 3 to 5 per cent in the last few weeks.
"Some people are collecting the cashmere even though they do not have orders," he said, "because they think, and I also think, that this is the bottom price."
The full article contains 808 words and appears in Scotland On Sunday newspaper.
