Carpet export earnings dip 13pc in last fiscal

EARNINGS from carpet exports declined 13.64 percent to US$ 61.01 million in the last fiscal year 2012-13. According to the Trade and Export Promotion Centre (TEPC), shipments of hand-knotted woollen carpets dropped 22.92 percent to 479,277 sq m along with export revenue. In 2011-12. Nepal exported 621,771 sq m of carpets and earned US $ 70.65 million. Exporters said that increased cost of production and tough competition in the international market were the major factors behind the fall in carpet exports. Ram Gurung, senior vice-president of the Nepal Carpet Exporters’ Association, said carpet exports were affected by

growing competition from Indian and Chinese products in the main export markets. The US is the largest buyer of Nepali carpets followed by Germany, the UK, Canada and Italy. According to the TEPC, Nepal exported 194,399 sq m of carpets (40.56 percent of the total export volume) worth US$ 29.11 million to the US. Earnings from exports to the US amounted to US $ 32.25 in 2011-12 on when Nepal shipped 228,713 sq m of carpets. “As Indian and Chinese traders have been aggressively expanding their markets there, Nepali carpets are having a hard time,” said Gurung. According to him, Indian and Chinese products are cheaper compared to Nepali products. He also identified inadequate publicity and labour shortages as reasons for the decline in exports. “There is no cash or technical support from the government for increasing publicity and participating in international trade fairs,” he added. Similarly, GK Joshi, director of Joshi Carpet, said financial problems in Europe and the US as well as increasing production costs in the country contributed to the decline in exports. “With the revised wages announced recently, labour charges for 100-knot carpets have gone up by US$ 11 per sq m while for 60-knot carpets, wages have increased by US$ 6 per sq m,” said Joshi. He added that the cost of raw materials that are mainly imported from China and New Zealand had also increased to Rs 455 per kg from Rs 380 per kg in one year. Although traders are hopeful due to a recent increase in orders for Nepali carpets, they said labour shortages could affect timely delivery. “Exporters have received orders for 50,000-60,000 sqm of carpet in the last two months from Europe. But we are worried whether we can fulfil the orders on time amid labour problems,” said Joshi. Gurung also stressed the need for government programmes to improve the skill of workers to enhance the sector. “Besides, the government should provide adequate budget for the publicity of Nepali carpets in the international market,” he said. “Also, the government needs to declare a export tax holiday for the next 10 years to enable local products to compete with those from the two neighbouring countries. As per last year’s figures, the Shangrila Carpet and Handicraft topped the list of exporters in revenue. The company exported 16,876 sq m of carpets worth Rs 290.06 million in 2012-13. It was followed by Kaju Art Rugs, Himalayan Art Carpet, NP Rugs Industries and Tibet Carpet.