KATHAMNDU, June 30: Despite the drop in volume of exports, Nepali hand-knotted carpet exporters enjoyed 40 percent rise in their income over the first ten months of 2011/12, thanks to strengthening of the US dollar.
Owing to almost 25 percent depreciation of Nepali rupee, Nepali exporters during the period received on average Rs 8,018 per square meter of hand-knotted carpet. They were receiving on average just Rs 5,103 per sq meter and Rs 5,669 per sq meter in the same period of 2009/10 and 2010/11 respectively.
"Thanks to the exchange rate gain, hand-knotted carpet fetched a total of Rs 4.84 billion over the first ten months of 2011/12, even though the export volume remained low at 603,631 sq meters," reads a report of Trade and Export Promotion Center (TEPC).
During the same period last year, Nepal had exported 698,517 square meters of carpet that fetched foreign currency worth Rs 3.96 billion only. In the same period of 2009/10, Nepal had exported 652,517 sq meters of woolen carpets earning Rs 3.33 billion.
TEPC data shows that Nepali exporters mainly received a blow from European markets as demand there shrank in the wake of Euro zone crisis. But exporters found new markets in the US, which for the first time emerged as the biggest single importing country of Nepali carpets.
So far, Germany used to be the largest importer of Nepali hand-knotted carpet. "But US overtook Germany this year," reads the TEPC report.
Nepal exported 223,582 sq meters of woolen carpet worth Rs 2.1 billion to the US during the period. Exports to Germany, on the other hand, remained at 207,821 sq meters and amounted to just Rs 1.29 billion.
Carpet exports to other major European markets also fell during the period. For instance, exports to the United Kingdom dropped to 29,333 sq meters from 32,667 sq meters, Belgium to 12,077 sq meters from 13,479 sq meters, France to 7,984 sq meters from 11,945 sq meters, and the Netherlands to 9,951 sq meters from 11,410 sq meters.
Rajendra Bahadur Shrestha, executive member of Central Carpet Association (CCA), attributed the drop in European exports to prolonged economic crisis there. Owing to the crisis, he said, buyers there are importing cheaper carpets from countries like Turkey.
"Good thing for us is our persistent efforts to explore new markets in the US have started to yield positive results, and salvaged the industry. Otherwise, such a sharp drop in European exports would have hurt the industry badly," said Shrestha, who is also the proprietor of Pari Carpet -- a leading producer and exporter of Nepali hand-knotted carpet.
According to exporters, Nepali-hand knotted carpets are fast replacing traditionally dominant Iranian carpets in US because Nepali carpets are of better quality.
"Rise in earnings from carpet export is the result of strengthening of US dollar against Nepali currency and also rise in the prices of Nepali carpet on the back of growing production cost," added Shrestha. According to exporters, they have increased the export price of carpet by around 20 percent this year to cope with rising production cost.
Likewise, Nepali rupee had weakened to Rs 85 per US dollar in mid-May from Rs 72 per US dollar recorded in mid-May last year.