ULAANBAATAR/SHANGHAI (Reuters) - Mongolia, supplier of about 40 percent of the world's raw cashmere, hopes to boost profit trading in the wool used in some of the world's priciest luxury fashions by opening up a new online platform for global buying via China's Bohai exchange.
In a statement on Friday, the Mongolian Commodity Exchange (MCE) said the platform should begin trading in mid-April. Until now, traders or their representatives have had to be physically present to buy cashmere from the MCE, Mongolia's only permitted cashmere trader.
The exchange said trading in agricultural products and also coal and copper could follow at a later date. But cashmere currently accounts for around 90 percent of the exchange's total trade: In 2017, 7,000 tonnes of washed cashmere were sold on the MCE with a total value of 521 billion tugrik ($217.99 million).
"Cooperation with the Bohai Commodity Exchange is opening up a market for Mongolian commodities not only in China but to other countries as well," Chuluunbaatar Bayar, general manager of the MCE, told Reuters.
"Italian buyers would be able to buy Mongolian cashmere via the Bohai exchange, for example," Chuluunbaatar said. "The online platform allows factories to purchase Mongolian cashmere through the Bohai commodity exchange directly, without sending their representatives to Mongolia."
The cashmere launch follows the signing of a strategic cooperation agreement with the Bohai Commodity Exchange (BOCE) in January. BOCE already trades a variety of textile products including cotton, cashmere, goose feathers and eiderdown.
BOCE did not immediately respond to requests for comment when contacted by Reuters on Friday.
Mongolia has struggled to maximize profit from its cashmere industry, with most of the processing done more cheaply across the border in China.
The Mongolian government launched a four-year program to boost the industry in February, with the aim of boosting exports more than fivefold, providing financial support to help domestic firms improve technology and boosting the country's processing capacity.
The Development Bank of Mongolia and the Ministry of Food, Agriculture and Light Industry have also established an 500 billion tugrik "Cashmere Development Fund".
Mongolia has an estimated total of 27 million goats, and an annual cashmere production capacity of 9,400 tonnes.
(This story has been refiled to correct the spelling of the author's name)