Prices for animal fibers are putting pressure on suppliers as demand within in this sector continues to grow. Apart from wool prices, which have been rising due to strong demand from China, yak fiber prices also went up dramatically this year. Since January 2017, crude yak prices increased 100% within 8 months. During the same period, prices of yak down rose more than 70%.
Yak has limited production and it’s not possible to increase the supply within a short period of time. Most yak fiber comes from the Himalayan Plateau in Tibet where there is a small and steady supply that served what has been a very niche market. At the moment, China produces around 1,000 tons of yak fiber annually, roughly accounting for 95% of the world’s total yak fiber production.
The supply of yak fiber is relatively stable so this sudden boom in demand has hit the market hard. Brands and retailers who are using yak as a cashmere substitute are driving the demand.
The consumer desire for super soft touch materials with a luxurious look and hand feel made cashmere a retail ‘must-have’. However, limited supplies of cashmere sent buyers searching for alternatives.
All of a Sudden, Everyone Wants Yak
“A lot of cashmere traders are switching to trading yak this year. There are so many more people rushing into buy yak now, and this has driven the price up dramatically. Currently, the raw yak price is about RMB 70 per kg (US$11 per kg). Usually you can get 20 percent down hair from the raw yak,” said Betty Yang, sales at Qinghai Xuezhou Sanrong Group Co., Ltd. The company is the largest yak wool supplier in China, and has an annual capacity of 100 to 150 tons of yak yarn.
Rising raw material prices may be good news for speculators, but it has a very negative impact on the apparel industry.
“As you can see, the raw yak price almost doubled this years. However, the yarn price only went up about 30 percent. This means we have to find a way to digest the big jump in raw material price,” said Ms. Yang. “This year, we plan to decrease our production. At the moment, raw yak prices are very high. It is too much of a risk to carry a lot of raw material. Eventually, we will probably make 50-60 tons of yak yarn this year,” she told Inside Fashion.
Many other spinners also experienced the same situation. On one hand, suppliers are happy that there are increasing demands for yak products. On the other hand, many are concerned about increasing raw material prices are eroding their profit margins.
“Our yak collection was one of bestselling collections last since. Many buyers are asking for it so this year we upgrade the products to make a product that is washable. We are expecting the sales of this line to continue to grow rapidly next season. However, the raw material prices keeps going up and that may pose some challenges to us. It is not only about price, during April and May this year, it was even difficult to buy the raw materials [do to limited supply],” said Aaron Sung, senior manager (yarn sales) at Esquel Enterprises Limited.