We visited a cashmere factory that makes $500 sweaters to find out what makes the material so expensive

• Cashmere is one of the most sought-after fibers in the world, especially for making scarves and sweaters.
• The material is softer, lighter, and can be up to three times more insulating than sheep wool.
• But quality cashmere comes at a cost - a luxury cashmere piece could cost you well over $500.
• Watch the video above to find out why cashmere is so expensive.

Cashmere is known for being one of the softest fibers in the world, it's thin hairs mean that it can be woven into incredibly soft, luxurious garments and it's long lasting, but it comes at a cost.

Cashmere doesn't come from a sheep like you might think, but from the cashmere goat. These goats are found across the Himalayas where temperatures can drop to -30°C and their freezing cold habitat means that they grow an incredibly thick, warm coat. Cashmere goats have two layers of hair, thick wiry guard hairs and a super-soft cashmere undercoat. While a sheep can produce at least 3 kilos of wool each year, a cashmere goat will only give you around 200 grams.

Because of the tiny amount each goat produces the supply is severely limited, and the fibers can only be collected once a year. Even when you've harvested the fibers the usable weight halves once it's been stripped of grease, dirt, and thicker hairs and cashmere still only makes up 0.5% of the world's total wool production.

Once you have the pure cashmere, processing it takes a lot of work. The fibers are first dyed to the right color and aerated to stop them clumping together. Cashmere's softness means it needs to be treated delicately throughout the whole process, any chemicals or over processing will damage the fibers.

The fibers are then carded, a process that de-tangles and lines up the hairs in thin sheets so that they can be spun into a yarn. The quality of cashmere is graded on its fineness and length, and high quality individual cashmere hairs can be as thin as 14 micrometers.

Cheaper cashmere products have become hugely popular recently. These claim to offer the quality of cashmere for a lower price, some may use a slightly lower grade of cashmere, or different processing methods to make the end result more affordable. And while they are comparatively cheap, they're still usually at least twice the price of wool.

There have been extreme cases of mislabeling too, and some supposedly 100% cashmere products have been found to contain yak hair or even rat fur. If you do find a really cheap product that claims to be cashmere, it may be too good to be true.