Carpet export dips by 3.05 percent

Carpet export dips by 3.05 percent
eKantipur.com, 23-April-2007
By Tapas Barsimha Thapa

Woes for the Nepali carpet industry continues, as the export of hand-knotted woolen carpet went down by 3.05 percent during the first nine months of current fiscal year, compared to the same period last year.

According to the data compiled by Trade and Export Promotion Center (TEPC), a total 976,782.08 square meters of the woolen carpet was exported to more than 48 different countries and the quantity was 13.69 percent less than what was exported during the same period last year.

Along with the fall in the quantity of export, total earnings from export also witnessed a decline of 3.05 percent to US$ 56.09 million as against US$ 57.85 million seen last year. But things could be getting better slowly.

Amid slowly improving business environment, knowledgeable carpet traders said that the fresh flurry of delivery of backlogged products has pushed up export figures.

Export in the mid-March-April of 2006/07 increased by 13.69 percent to stand at US$ 7.2 million compared to exports during same period last year, when it was US$ 6.3 million.

Kabindra Nath Thakur, president of Nepal Carpet Exporters Association (NCEA) attributed the rise to the end of terai unrest and decrease in strikes, chakkajams and bandas. “That helped in delivery of products, which were supposed to be delivered in the previous months,” said he.

This is evident considering that the export figure in the ninth month of this fiscal year was 42.32 percent more than that in the eighth month. The monthly export in the period between mid-December 2006 and March 2007 stood at around the five million US dollar mark owing to the general and labor strikes in the industry.

Thakur, however, warned that the recent increase should not be taken too positively, as the overall picture of export of hand-knotted woolen carpet is still dismal.

“The labor problem that mired the industry is almost resolved. If peace persisted, we can produce and deliver carpets in time. But don't expect too much good news. A lot of other factors have increased the cost of production,” he said.

He informed that a settlement with the labor unions to end labor strike has added five to ten US dollars to the current cost of producing per square meter of carpet. The cost of processing, wool and other factors of production has also gone up.

This has added some seven to seventeen US dollars to the current rate for the finished products. Another factor affecting the market is the sharp decline in the value of the US dollar.

Thakur said that the government's apathy toward the industry, which is Nepal's biggest foreign currency earning export, still continues pushing clients toward neighboring India.

According to Thakur, 1,484,484.42 square meters of carpets were exported in 2005/06 fiscal year, while exports would not even cross the 1.2 million mark this fiscal year.