Commodity Exchange fee on washed wool raised to encourage final productionSociety
Ulaanbaatar /MONTSAME/ The Mongolian Commodity Exchange fee on washed wool has been raised by 15 percent while fee on combed wool has been lowered to 0.2 percent.
On July 19, Mongolian Commodity Exchange (MCE) LLC and Mongolian wool manufacturers held press briefing regarding the decision at the Ministry of Food, Agriculture and Light Industry. Present at the press briefing were CEO of the MCE Kh.Baatar and CEO of Mongolian Wool Manufacturers’ Association Ch.Erdenebat as well as the association members including Erdenet Carpet LLC, Ulaanbaatar Carpet LLC, Mogol Noos LLC and Sor Cashmere LLC.
In June 2018, above mentioned companies put in a request for increasing wool fee of the MCE in order to support wool combing and final production to the Ministry of Food, Agriculture and Light Industry. The Ministry and the MCE studied the request and made the decision to increase the 0.32 percent fee on washed wool by 15 percent and to decrease the fee on combed wool to 0.2 percent. Thus, fee on combed wool is MNT 9.3 now. Wool manufacturers noted this is a decision that encourage production of end products, meeting domestic the demand and the export.
They also highlighted that increase of the wool fee is not intended to drop or impact the market price of wool, but to prevent rapid increase in price of less processed wool and stabilize it. They consider wool price up to MNT 3000 is reasonable and washing, combing and final production expenses will be reduced, therefore consumers will not face cost burden. They stated that herders need to supply qualified wool to the national manufacturers when selling it at high price and receiving incentive of MNT1000 per kilogram of wool.
According to the statistics, Mongolia supplies 40 percent of the sheep wool and 70 percent of the camel wool of the total world consumption. In 2017, wool manufacturers washed and exported 67 percent of the sheep wool and 90 percent of the camel wool they purchased. Over 30 thousand tons of wool is produced annually in Mongolia and national manufacturers aim at processing 26 thousand tons of wool domestically.