🐐 MONGOLIA'S CASHMERE EXPORT MARKET | WORLD EXPORT DEVELOPMENT FORUM

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Hello, adventurer! Are you ready for the amazing Naadam festival? This is a once-in-a-lifetime opportunity to experience the rich culture and history of this beautiful country. If you haven’t made your travel itinerary yet, be sure to check out travel vlogs on YouTube and Instagram for best tips and tricks. Meanwhile, we have some interesting stories about Mongolia’s cashmere industry and trade strategy for you!

🐐 MONGOLIA AIMS TO BOOST CASHMERE EXPORTS AMID MINING DEPENDENCE

Mongolia, which relies heavily on mining products for its exports, is seeking to diversify its economy by increasing its output of processed cashmere products.

The country, which ranks second in the world in the production of raw cashmere after China, plans to change from an exporter of raw materials to an exporter of processed products by 2025, according to the government.

Cashmere exports accounted for 3% of Mongolia’s total exports last year, reaching $444.4 million, a 33.4% increase from the previous year. The government expects this figure to rise to $660 million by the end of this year, as it has decided to export only combed cashmere from 2023.

• Combing is a process that separates the fine cashmere fibres from the coarser hair of the goat. It reduces the weight and increases the value of the raw material.

• Mongolia collects about 10,000 tonnes of raw cashmere annually, which shrinks to 7,000 tonnes after washing and 5,000 tonnes after combing. If exported at the current exchange rate, combed cashmere has the potential to generate $500 million in revenue.

• However, if further processing is supported and combed cashmere is spun and turned into finished products, such as sweaters and scarves, the revenue could reach $1.5 billion, according to industry experts.

This would match the income from Oyu Tolgoi, Mongolia’s largest copper and gold mine, which earned $1.4 billion in sales revenue in 2022.

The government hopes that increasing the number of factories for exporting final products in the cashmere sector will help to start structural reform of the economy and reduce its dependence on mining.

Mining products, mainly coal, and copper, account for about 94% of Mongolia’s total exports. The country fell 17 places in terms of diversification of export products in the last 15 years and ranked 117th, according to the World Bank.

🤝 WORLD EXPORT DEVELOPMENT FORUM 2023

The 20th World Export Development Forum (WEDF), an annual flagship event of the International Trade Centre, begins today in Ulaanbaatar, Mongolia. The conference, hosted by President U. Khurelsukh, will focus on “Diversifying Green Trade: Organic, Digital, Sustainable”.

Tapan Mishra, the UN resident coordinator in Mongolia, shares his insights on the country’s export situation and prospects.

Mongolia’s export woes

Mongolia’s foreign trade turnover rose by 32% last year, helping the economy grow by 4.8%. But this was mainly driven by a recovery in coal prices and China’s demand. Mining products still account for more than 90% of Mongolia’s exports, with China taking more than 80% of the total. The country also faces challenges such as high logistics costs and lack of access to the sea.

• Statistics: According to the World Bank's Logistics Performance Index, Mongolia ranked 97th out of 139 countries last year, primarily due to high transportation costs. This was an improvement from previous years, but the logistics industry still has room for development.

Dry port

As a landlocked country, Mongolia has no choice but to conduct foreign trade through its neighbouring countries. Consequently, transportation costs alone account for 30% of the overall expenses associated with delivering goods to consumers.

One potential solution is the dry port project, which aims to create inland cargo hubs that can connect to seaports via rail or road. The Ministry of Road Transport and Development agreed to cooperate with the UN Economic and Social Commission for Asia and the Pacific on this project in February. If successful, it could reduce freight costs and increase efficiency.

🎆 HEINEKEN CELEBRATES 150 YEARS OF GOOD TIMES

Heineken, the beloved Dutch brewer, is celebrating its 150th anniversary this year with a global campaign that draws on its founder’s philosophy of “Gezelligheid” - a Dutch word that roughly translates as “cosiness” or “conviviality”.

Tell me more!

The campaign, which features various content solutions, aims to convey the message that Heineken is not just selling beer, but a good time with friends and family.

In Mongolia, APU, the local distributor of Heineken, will offer a special deal to mark the occasion: four Heineken products for ₮15,000, or about $4.40.

🔗 Click here for more information

🏃 QUICK STORIES

🔵 The Bank of Mongolia maintains the policy rate at 13%. The decision to hold the rate hike is primarily driven by ongoing external risks, economic uncertainty, and increasing budget costs. It aims to stabilize inflation around the target level, ensure both external and internal economic balance, and support the strength of the local currency.

🔵The World Export Development Forum 2023 is set to take place in Ulaanbaatar from June 26 to 29. The conference will focus on fostering a green economy, trade, and exports, establishing a conducive business environment for small and medium-sized enterprises (SMEs), particularly for women and youth. Additionally, the forum aims to foster regional and international cooperation, unlock new markets, and identify innovative opportunities.

🔵An extraordinary shareholders’ meeting of the Mongolian Stock Exchange (MSE) is set to be held on June 30. The upcoming meeting will involve the election of members for both the supervisory board and the board of directors, while also entailing a review and amendment of the charter and working procedures of the supervisory board. Meanwhile, the stock price of MSE has surged 43.6% since its IPO.

🔵Ulaanbaatar will host its inaugural meeting of female foreign ministers. Taking place on June 29-30, the gathering will bring together female foreign ministers from 15 countries spanning different regions of the world, along with representatives from the UN and other international organizations. The agenda will encompass crucial discussions on women's involvement in combating climate change, ensuring food security, and bolstering international peace and security.

⭐ WATCH: NAADAM in MONGOLIA 2022 Vlog

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Editor: E. Zolbayar
Writer: A. Purevjargal & A. Bilguun 

Disclaimer: The information Inside Mongolia provides is for educational and informational purposes only. It is not intended to be and does not constitute financial advice, trading advice, or any other advice. The decision whether to consider the information we provide is solely our readers' independent decision.