China's cashmere price index has climbed more than 20% this year, with average prices in the first five months up roughly 17% year-on-year and premium raw material quotes hitting multi-year highs. These figures say more about the industry than any conference slogan. Prices are the most honest data in the supply chain, and behind them lie structural shifts in supply, breeding and vertical coordination. The 32nd National Wool & Cashmere Conference recently closed in Yulin, Shaanxi, under the theme of quality-led industrial integration. What deserves closer scrutiny is how the price upcycle and capacity concentration are interlocking.
Price Signals: Supply Is Quietly Shifting Gears
Raw material price increases are often simplistically attributed to recovering demand, but the cashmere logic is more complex. Industry public data show that cashmere output in 2025 hit a record high against the trend, with the sector displaying a pattern of fewer animals but more cashmere. Growth is no longer driven by herd expansion but by improved breeding and higher yields per animal.
For buyers, the impact is structural: finer fiber, longer staple, higher net cashmere yield and a larger share of premium cashmere directly raise product value at the finished end. Bargaining room for low-grade material is being compressed, while mills with stable premium supply gain pricing power. What is rising is not cashmere per se, but good cashmere.
Regional Dynamics: Yulin Moves from Raw Material Base to Manufacturing Hub
Yulin has built a complete chain spanning forage planting, breeding, raw cashmere procurement, dehairing, brand building and market sales, with nearly 300 upstream and downstream enterprises. Its annual capacity for cashmere cold-weather garments exceeds 16 million pieces, accounting for more than 75% of the national market in that category. These capacity figures show Yulin is no longer just selling raw material.
More noteworthy is infrastructure. The Yuyang Light Textile Industrial Park, with total investment of nearly 6 billion yuan, has put 14 standardized factory buildings into operation in phase one, hosting 24 light textile firms, while phase two will be fully completed next year. The park also includes an innovation R&D center and a cashmere product quality inspection center, filling three key gaps in R&D, quality control and incubation. For downstream brands, this means supplier concentration is rising and the radius for factory audits and quality control is shrinking.
More than 40 local cashmere enterprises produce over 5 million pieces annually, exported to Europe, the US, Japan, South Korea and Central Asia. From raw material export to deep processing and brand overseas expansion, Yulin is following a typical path of industrial upgrading.
Standards and Policy: A Quality-Premium Mechanism Takes Shape
During the conference, the China Animal By-Products Circulation Association signed a strategic cooperation agreement with Yulin for the 15th Five-Year Plan period and commended member enterprises and experts involved in revising two mandatory national standards. The association said it will continue participating in the revision of group, industry, national and even international standards, improving the full-chain standards for raw material grading, quality evaluation and market trading.
The industrial judgment behind this is clear: the cashmere market is worth about 120 billion yuan and is expected to grow to 180 billion yuan by 2030, at an average annual rate of about 8%. Consumption upgrading is pushing natural, green cashmere products into diversified scenarios such as home textiles, outdoor and guochao light luxury, while improving traceability systems are raising international recognition of domestic cashmere. Standards are not paperwork; they are the foundation of a quality-premium mechanism. Without grading and evaluation standards, good cashmere cannot command good prices, and bad money keeps driving out good.
The three transformation paths proposed by the industry are worth noting: from stable scale to high-quality development, from supply chain upgrading to value upgrading, and toward ecological, smart and standardized farming. All three point to one conclusion: competition has shifted from raw material volume to a comprehensive contest of quality control, standards, vertical coordination and brand value.
Practical Recommendations
For Buyers - Reassess suppliers' premium cashmere share and testing capability; in a rising price cycle, stable fineness and net yield matter more than low prices - Track the commissioning pace of phase two and the quality inspection center at Yuyang Light Textile Industrial Park to localize audits and quality control - Specify raw material grading criteria in contracts to avoid negotiating at commodity prices while receiving premium-grade goods
For Exporters - Seize the window of rising international recognition for domestic cashmere and prepare traceability and sustainability documents in advance - Watch how brand overseas moves such as Milan Fashion Week reshape order structures, and explore the shift from raw material to finished product exports - Price by region across Europe, the US, Japan, South Korea and Central Asia, passing rising premium raw material costs downstream in advance
Price increases are not short-term fluctuations but a sign of industrial gear-shifting. Whoever can link premium raw material, standard-setting power and brand premium into one chain will hold pricing power in the next cycle.