Carpet exports likely to drop as int'l buyers cut orders
KATHMANDU, Feb 10: Overseas carpet buyers have informed Nepali exporters that imports of Nepali hand-knotted carpets will go further down this year amid uncertainty on timely delivery of the product and rise in production cost.
Global importers, who gathered at DEMOTEX -- a global exhibition of floor coverings -- from January 12-15 in the German city of Hannover, also expressed concerns over soaring prices of Nepali carpets in the international market.
“Despite impressive quality and designs, the demand for Nepali carpet is going down in the international market due to ever increasing price fuelled by soaring production cost,” Anup Malla, president of the Nepal Carpet Exporters Association (NCEA), told Republica on Saturday.
Malla, who attended the DEMOTEX, said Nepali carpets have become around 40 percent expensive than carpets produced in India, Nepal´s major competitor. India, China and some other countries have been supplying carpets to Europe and the US at cheaper prices.
Importers attending the four-day German fair, especially from Europe and the US, told Nepali delegation that they were going to reduce imports of Nepali carpets this year, as they doubted timely delivery of consignments on the back of shortage of skilled laborers and lengthy power cuts in Nepal.
Nepal carpet factories are facing acute shortage of workers with the exodus of youths to overseas job markets seeking greener pasture.
“Rise in production cost due to strengthening of the US dollar has eventually made Nepali carpets far dearer than those produced by India and other countries. Price conscious international buyers are now purchasing cheaper carpets from other source countries,” said Malla.
Average price of Nepali carpet stands at US$115 per sq ft, up from $93 of last year led by soaring cost of raw materials. The problem further compounded as buyers in major importing countries started tightening belts amid economic slowdown, causing exports of Nepali woolen carpets to take a dip.
Carpet exports dropped by 20 percent to Rs 2.58 billion year-on-year in the first six months of the current fiscal year. The quantity of exported carpets also declined to 250,616 sq ft during the review period from 383,281 sq ft.
“Carpet exports to traditional markets such as Europe and the US will suffer a major setback, unless we tame the soaring production cost,” added Malla.
Nepali traders also said promotional activities to expand the market of Nepali carpets have taken a dive in the last couple of years. An example of this is Nepal´s inability to hold Nepal Evening, an event organized annually to interact with carpet buyers on the sidelines of Hannover fair, for the last two years due to lack of representation form government officials.
Despite absence of government officials, around 30 Nepali carpet entrepreneurs attended the Hannover fair this year that provides a platform to hold interaction with buyers and suppliers of carpets.
“We could not formally interact with buyers due to absence of government officials who were supposed to make commitments to ensure timely delivery of products,” Malla said.