Market evolution: Cashmere knitwear (CN 611012) — 2015–2025

Introduction

This report examines the evolution of trade in cashmere knitwear (CN code 611012) involving the European Union with non-EU partners from 2015 to 2025. The data reveals a comprehensive transformation of the EU's position: it has transitioned from a slight net importer to a strong net exporter of this high-value product. This shift is driven by a significant outperformance in export value growth compared to imports, substantial diversification of sourcing geographies, and a profound domestic production collapse that has re-oriented the EU's role in the global cashmere supply chain.

From Importer to Exporter: A Surge in High-Value Trade

The most fundamental trend in the period is the EU's dramatic shift in its trade balance for cashmere knitwear, evolving from a deficit to a significant surplus. This transformation is underpinned by a faster growth in export values and a pronounced increase in the unit value of exported goods, suggesting an industry focus on higher-value segments.

Reversal of the EU's Trade Balance

Over the decade, the EU's trade balance for cashmere knitwear flipped decisively. The value of exports more than doubled from €236.6 million in 2015 to €510.0 million in 2025, a staggering increase of 115.5%. In contrast, import values grew by 50.8% over the same period, from €294.3 million to €443.8 million. Consequently, the EU moved from a trade deficit of €57.7 million in 2015 to a surplus of €66.0 million by 2025.

Outpricing the World: The Rise in Export Unit Values

This value shift was not merely volumetric but also driven by price superiority. The average price per tonne of EU exports consistently exceeded that of imports, with the gap widening substantially. By 2025, the export price stood at €644,409 per tonne, nearly double the import price of €153,264 per tonne. Similarly, the export price per item (supplementary unit) reached €262.67, vastly exceeding the import price of €23.69. This stark differentiation indicates that the EU is exporting high-value finished goods, while its imports are increasingly oriented towards lower-cost components or mass-market items.

Geographical Reconfiguration: Diversifying Sourcing and Destination Patterns

The EU's trade relationships for cashmere knitwear underwent significant geographic restructuring. While traditional partners like China maintained dominance, the period saw substantial regional diversification in both import sources and export destinations, introducing new risks and opportunities.

Shifting Import Origins: Asia's Growing Footprint

China remains the largest single import partner, accounting for a major share of the EU's inbound cashmere trade, with its import value rising from €161.1 million to €204.1 million. However, its relative share has evolved as other Asian manufacturing hubs grew rapidly. Notably:

Cambodia saw explosive growth, with import values surging 318.1% to become a key source at €66.2 million in 2025.
Myanmar also expanded dramatically, though from a very low base.
Conversely, imports from Madagascar and the United Kingdom saw varied trends, with the former contracting and the latter expanding.

This diversification is confirmed by the declining Herfindahl-Hirschman Index (HHI) for import concentration by value, which fell from 3,507 to 2,649, indicating a less concentrated sourcing landscape.

Export Destinations: Consolidation in Premium Markets

EU exports found strongest growth in mature, high-income markets. The United States, Switzerland, and Japan were the standout performers:

Exports to the United States grew 32.9% to €101.8 million.
Exports to Switzerland increased 57.7% to €49.1 million.
Exports to Japan experienced the most explosive growth, surging 140.2% to €34.9 million.

Meanwhile, exports to China experienced phenomenal growth (698.2%), suggesting a re-export trend or growing high-end demand within China itself, potentially linked to brand strategies. The export market also became less concentrated, as shown by the HHI falling from 1,688 to 1,087.

The Hollowing Out of Domestic Production and Heightened Export Fragility

Concurrent with the trade value shifts was a dramatic contraction in EU domestic production of cashmere knitwear, creating a greater dependency on manufacturing networks outside the bloc. This has profound implications for the EU's industrial base and its vulnerability to external supply shocks.

The Collapse of EU-Based Manufacturing

EU production of cashmere knitwear plummeted over the period. The number of items produced collapsed by 88.3%, from 247.4 million pieces in 2015 to 29.0 million in 2025. Production value fell by 61.5% to €1.02 billion. This severe decline indicates a massive offshoring of production capacity for this product category, with the EU economy shifting towards design, branding, and high-end finishing rather than full-scale manufacturing.

Specialisation and the Export Orientation

The data reveals a highly specialized EU industry structure focused on exporting. The Relative Comparative Advantage (RCA) for Italy was exceptionally high at 4.34, confirming its role as a global powerhouse. This aligns with the collapse in domestic production: the EU now imports components or semi-finished goods, adds high value through its design and branding ecosystem, and re-exports finished products globally. This model is underscored by the surge in export propensity (the ratio of exports to total available supply), which skyrocketed from just 0.9% to 141.1%, indicating that the EU's output is almost entirely aimed at external markets.

Increased Dependency and Volatility Risks

This restructured model increases the EU's trade intensity and net import reliance. While the net import reliance shifted to a positive export balance, the underlying dependency on imports for inputs has grown. Furthermore, new sourcing geographies often exhibit higher volatility. Partners like Myanmar (CV: 0.80), Viet Nam (CV: 0.96), and Tunisia (CV: 0.54) show much higher trade coefficient variations than China (CV: 0.10), signaling potential fragility in the supply chain.

Conclusion

The period 2015-2025 marks a conclusive transformation of the EU's cashmere knitwear market. The bloc has evolved from a balanced player into a dominant net exporter of high-value items, leveraging powerful brands and design capabilities—likely from traditional luxury hubs like Italy and France—while outsourcing mass production. This model has delivered strong value growth but has been accompanied by a near-total erosion of domestic production scale and an increased reliance on a diversified but potentially volatile network of Asian and North African sourcing partners. Future stability hinges on managing the risks embedded in this geographically stretched, highly specialized value chain.