“The companies whose names have been submitted to the bank by the Ministry can get loans at 3 percent interest on cashmere, wool and leather production”
Clarified from Dondogdorj.M, Head of the light industry policy implementation coordination department of the MOFALI on cashmere procurement and soft loans.
– Herders are already combed the goats and started selling the cashmere. There are 2 main conflicts on 2 interests of cashmere industry. On the one hand, producers want to buy raw materials cheaply, and on the other hand, herders want to sell them at a higher price. There are what kind of policies are holding from Ministry to implement the those 2 interest?
As of today, in the eastern provinces started combing the goats and selling the cashmere. There are some news among the buyers and herders that sold the 1kg of cashmere by 120-150 thousand tugriks through the contract. The real price will be fixed in the mid of the cashmere combing.
– The Government of Mongolia has decided to provide a loan of a 400 billion MNT to support agricultural production. Who can apply for a loan? What are the requirements to get a loan?
Cashmere product production raw material is the main non-mining strategical product. In frame of this, for the procurement decided to provide a loan on the cashmere 150 billion, wool procurement 25 billion and leather procurement 15 billion MNT with 3 percent interest and 2 years of duration.
The loan will be get by factories who are producing only in the industry. About the past year, cashmere loans were provided to factories with more than stages than dehairing. Our ministry will send the names of the factories that are operating in this industry to the commercial banks. As the source of the loan is from a commercial bank, the demand for a wool and cashmere and leather procurement is calculated from the commercial bank.
95 billion MNT loan is granted to cashmere producing manufactures.
– The aim of the loan is also directly connected to support the industry’s export?
Of course. Currently, we are deeply processing around 20 percent of raw cashmere internally and the rest of 80 percent are primary processed and exported. Regarding last year, we decided the 95 billion MNT resource to support the cashmere producing factories to prepare the raw materials.
This year, a government resolution was approved to continue the loan, and a major step is being taken to support producers as part of a policy to increase the level of deep processing. The loan is open to cashmere producers. The purpose of this support is to keep commodity prices stable, support and develop domestic producers, create value chains and increase exports.
– Herders and producers will clarify whether the price of one kg cashmere will increase of decrease or remain stable in the future?
MOFALI is not control or stabilize the cashmere price. The price is stable regarding the market principle. We directly provide policy support to keep prices stable and not to cut our domestic producers with raw materials. The support has become a reality and the Government of Mongolia has decided to issue a soft loan with an interest rate of 3 percent.
– The cashmere is main important export raw material of the agriculture. However, the technology of the processing and procurement stages are rejected by the big foreign players. What is being done to brand Mongolian cashmere and improve processing and supply technology?
In the case of cashmere exports, major foreign players are required to have a clear origin, to ensure the well-being of their livestock, to use their pastures and to ensure the well-being of their animals when combing their goats. Regarding this requirements we are approved the “Responsible nomad” standard.
We are included the requirements above in the standard. The Swiss Development Agency handed over the system how to implement and traceable this standard to Ministry last week. The importance of the traceability system is that will be guide to major foreign buyers about the origin and marketability of our cashmere.
– As we know, we are brand developing the Noble Fibre in the cashmere industry. This brand is compatible as the foreign buyers requirements?
In the manufacturing sector, production standards have been adopted to ensure the sustainability of textile producers. The main goal of this standard is to support the green production. Requirements have been set for the use of environmentally friendly, electricity and water saving technology.
We are certified and implemented those standards. In frame of the projects to provide and certifying the standard, we are developing the Noble Fibre brand. Regarding this brand, we are developing the Noble Fibre brand in order to introduce Mongolian cashmere to the world market and to prove that it is pure and not mixed.
The certification is done by Mongolian wool and cashmere association. By strengthening all these systems we are approaching our goal of stabilizing cashmere commodity prices and becoming a major player in the global cashmere market.
Source: MOFALI
March 22, 2022
