“We should always concentrate on long-term trends and returns for producers rather than short-term volatility,” explained Mohair South Africa general manager Deon Saayman.The drop in adult mohair prices during the 2010 winter season and the continuing lag in the prices of kid mohair have created challenges for many producers. “Any increase in prices which is ‘too much too fast’ is usually not sustainable,” said Saayman. “With a smaller global clip, prices are a lot more susceptible to drastic changes in supply and demand.”
Globally, mohair is still in a fashion cycle. This is most apparent in the knitwear sector, with hand knitting continuing to contribute to sustainable growth in the mohair yarn sector. The worsted cloth sector is still struggling to recover from the global economic slump, but the movement back toward the crisp feel in suiting, especially in Japan, will benefit mohair.
A notable stock build-up in the Chinese market caused a slowing down in demand. But inflation fears didn’t materialise, contributing to an easing in seasonal demand of mohair purchases. Meanwhile, the actions instituted to raise the floor price of adult mohair has had a stabilising effect on the adult market.
“However, the alarm bells should start ringing if the rise in the adult sector is too quick, as the Chinese market is very sensitive to these rapid price increases,” warned Saayman.Should the currency remain strong on a constant basis, mohair buyers will face a very difficult trading environment.