The cashmere industry is well organised, has one industry-owned marketing structure, has excellent contacts with overseas processors, and has had excellent scientific and technological research to direct its development. The main constraint is that there are too few animals on the farm producing too little cashmere per head. Fleeces from cashmere goats contain coarse hair, which has no commercial value, and a fine soft undercoat, or down. It is this fine down which is called cashmere. A small number of goats grow down which is not suitable for sale as cashmere and these goats are culled for meat production.
Australian cashmere is sold via a tender system based on objective measurements of the fibre.
The selling system is operated by the industry-owned Australian Cashmere Marketing Corporation. Most cashmere is exported in the raw state to Europe, USA and China where initial processing is done. The dehaired cashmere may then be spun and made into fabrics in other locations. Several Australian manufacturers have purchased fibre and produced knitwear for local consumption and export. China is rapidly developing its cashmere manufacturing sector and is now the main exporter of cashmere textiles.