Contents
Industry Background
Management
Nutrition
Animal Health
Breeding
Fibre Production
Fibre Marketing
Meat Production and Marketing
Pasture and Weed Control
Economic Analysis
Tanning Skins

G2

Aspects of Marketing the Australian Cashmere Clip

History of the Australian Cashmere Marketing Corporation

From 1980 until 1985 cashmere was sold privately by growers to one of three international buyers. Grower lots were generally small with varying classing standards. The buyers found it difficult and costly to re-class the fibre and handle many small lots of fibre. In 1986 the Australian Cashmere Marketing Corporation (ACMC) was set up to establish consistent lines of fibre and market the clip.

Since that time, fibre has been sold on behalf of growers using a number of methods of sale. First sales were by tender telex, in which buyers submitted tenders for fibre by telex. Later the fibre was sold under a contractural system to Joseph Dawson, a member of the Dawson International PLC group of companies, Filati Biagioloi Modesto of Italy and the Forte Cashmere Company of the USA. The three buyers were supplied with consistent proportions of the Australian clip. In return the buyers supported the Australian industry support in the form of funds for promotion of cashmere production in Australia, and they agreed to conduct or encourage product development with Australian cashmere.

The contractural system with the three buyers broke down during a cashmere price crash, but fibre continued to be purchased by Forte. Later sales were made to Forte and a new buyer, the Luda-Dawson company, based at Baotou in Inner Mongolia China and to Australian buyers Arjae Cashmere and Belisa Cashmere. Fibre was sold by private treaty for several years, with the Luda company taking an increasing proportion of the clip. In 1997, the fibre was again agreed for purchase by the Luyan company, but the sale fell through when cashmere prices fell in response to the Asian economic downturn. Forte again purchased the bulk of fibre from the 1997 and 1998 clips with a premium line going to the Australian company Unicon. More recently fibre cashmere has been sold in dehaired form by private treaty. First buyers of dehaired Australian were Seal International of Bradford, UK and Unicon, Australia.

Aims of the Australian Cashmere marketing Corporation.

The ACMC seeks to present and market the fibre to best effect for the short to medium term best interest of growers. For this reason a consistent strategy has been to market the clip to a limited number of buyers, but preferably at least two. This is to ensure that each buyer has sufficient fibre to generate worthwhile processing runs. A minimum of two buyers is preferred so that some measure of competition is retained and to provide some security in the event that one buyer drops out of the marketplace. This strategy has at times been difficult to achieve. In some instances sufficient fibre has not been available to meet buyers requirements. In other instances a perceived conflict between maximising price, ensuring continuity of supply to valued clients and ensuring medium term security of growers though ensuring more than one buyer remains in the market have occurred. There are no easy solutions to this conflict and each instance has had to be considered on its merits. However, at the end of the day a decision must be made and it is the marketing committee made up of members of the council of the Australian Cashmere Growers Association who were in turn elected by growers who have delegated authority to make this decision.

Sale procedures.

Australian cashmere is sold by description, interested parties are provided with a set of objective descriptions and the ACMC clip preparation standards. Buyers new to Australian cashmere sometimes request samples matching the ACMC fibre classes. However once familiar with the classes, buyers have commented favourably about the consistency of clip preparation and cleanliness of the Australian fibre and are happy to purchase on objective description rather than sample.

Leading up to a sale, it is necessary to keep track of price movements in the international market for cashmere, watch consumption patterns and keep an idea of the trends in production and buying patterns so that anticipated price and grounds for negotiation can be established. Negotiations between buyers and the ACMC continue until agreement is reached. Contracts reflecting the terms of the agreement are then signed.

Marketing Dehaired fibre.

In 2000, the ACMC moved from sale of raw fibre to sale of dehaired in response to the marketing opportunities that this offers. Buyers prefer to purchase dehaired with as they can be confident of the quantity and quality of down offered. When purchasing raw fibre, buyers must find a dehairer capable of recovering the cashmere present in the raw fibre. This has been a problem for a number of buyers because Australian cashmere requires dehairing equipment with different calibration from that used for fibre of Chinese or Iranian fibre. Underyields for this reason have made Australian fibre appear less attractive to buyers. Sale of dehaired fibre also makes the fibre available to a far greater range of users who would not normally consider commissioning dehairing themselves, such as those processors who may wish to include a cashmere blend in their range of product. Dehairing also offers opportunity to add substantially to the value of ‘fault’ lines such as those fibre lines with low yield or vegetable contamination. It is effectively able to bring at least some of the fibre from these lines up to a similar standard as the main sale lines, albeit at a greater dehairing cost.

Conclusion.

Australian cashmere has an international profile substantially greater than the historical market volume would suggest. Our clip has a reputation for being exceptionally clean and well presented. Australian cashmere is acknowledged as the best prepared and most repeatable source of cashmere in the world. The down has greater tensile strength and is reputed to possess exceptional softness. Buyers seek repeat purchase of dehaired Australian. Marketing will continue to review procedures and build on these strong foundations.

© 2000 ACGA