Carpet exporters initiate price renegotiation with buyers
KATHMANDU, Nov 29: Nepali exporters have started re-negotiations with international buyers to increase the price of hand-knotted carpets to reduce their loss after Nepali rupees strengthened against the US dollar compared to the value few months ago when exporters bought the raw materials and agreed on tentative export price.
Anup Malla, president of Nepal Carpet Exporters Association (NCEA), said the exporters were not in a position to sell carpet at the agreed price at a time when the greenback´s value is comparatively lower compared to the time when they bought raw materials in US dollar.
“When we purchased raw materials, the US dollar was the strongest ever against Nepali currency. Now our products are ready for exports, but the greenback is comparatively weaker,” Malla said. “That is why we are re-negotiating with our buyers to convince them to buy our products at higher rates so that we won´t have to suffer.”
Malla told Republica they had fixed selling price when the value of a US dollar was hovering at around Rs 92. A US dollar was exchanged at Rs 89.22 on Wednesday.
“We are trying to convince our buyers to raise price by around 20 percent compared to what we had agreed earlier,” Malla said.
Malla said some entrepreneurs are reluctant to export carpets given the weakened US dollar which means lower export income. “Carpet exports have dropped significantly over the past few months compared to last year´s figure, as exporters are in negotiations with the buyers to increase the price of carpets in line with the fluctuation in the value of US dollar,” added Malla.
According to Trade and Export Promotion Center, export of carpet dropped by whopping 24.8 percent during the first quarter of the current fiscal year compared to figures of the same period in the last fiscal year. The country exported 154,391 square meters of carpet worth Rs 1.29 billion during the review period. During the same period last year, Nepal had exported 213,734 square meters of carpet worth Rs 1.71 billion.
However, international buyers, mainly those in Europe, are not showing willingness to offer higher prices for Nepali carpets which are comparatively costlier than those being exported from other countries.
Carpet entrepreneurs also said deepening shortage of skilled labor and prolonged power cuts are limiting their production capacity.