Nepali producers and exporters who participated in the world expo of carpet and flooring goods in Germany painted a grim picture of carpet export prospects, especially to European countries - the largest market for Nepali carpet. [break]
Around one and a half dozen Nepali carpet producers and exporters participated in the ´DOMOTEX Hannover 2012´ held in German city of Hannover during January 14-17, which saw a visitor turnout of 45,000. As many as 1,371 exhibitors took part in the exhibition.
“We are not optimistic on the export prospects and expecting slowdown in carpet export this year (2012) as most buyers have complained that price of Nepali carpet is far higher than those offered by India, which is a major competitor for Nepal in carpet exports,” said Rajendra Shrestha, a leading exporter, who has just returned to Nepal after participating in the four-day international event. Shrestha said buyers were looking for quality carpet, timely delivery and lower prices.
“European importers are on ´wait and watch mode´ as far as the quantum of order to be placed with Nepal is concerned. We have felt that there should be major departure in our strategies to retain European market, with innovative products, cost reduction and maintenance of quality of our exportable carpet,” said Shreshtha, who is also the proprietor of Pari Carpet Industry.
Total export of Nepal carpet to overseas markets during the fiscal year 2010/11 stood at Rs 4.92 billion, up by 15.6 percent compared to previous fiscal year. According to him, cost of production of carpet stands at around 40 percent higher than what it is in India.
Some of the Indian exporters has been exporting carpet under the brand name of ´Indo-Nepal Carpet´ at a lower price than what Nepali manufacturers ask for hand-knotted carpet from international buyers.
According to Gopal Krishna Joshi, proprietor of Joshi Carpet Industry, Nepal has priced hand-knotted carpet at 50 Euros for 60-knot carpet whereas Indo-Nepal brand, which though made in India uses reference of Nepal in its brand name, for 30 Euros. A representative from Joshi carpet also participated in the German fair.
“Though Nepali carpets are far better in quality than those from India, lower price of Indo-Nepal carpets is doing a lot of damage to our markets as European customers and importers are more conscious of price amid their weakening purchasing power,” said Joshi.
Worsening power shortage, absence of state incentives as well as increasing cost of labor and raw materials (cotton yarn, wool), uncertain delivery time due to labor unrest and frequent bandas are the major factors affecting the competitive strength of Nepali carpet in the international market. According to him, cost of production of Nepali carpet has shot up by more than 40 percent in a year.
“Carpet entrepreneurs can´t reduce the cost of production on their own. The government should support them by giving more state incentives as India has been providing to its carpet producers and exporters,” said Joshi.
Though the government announced incentives for exporters of any exportable goods that have higher value addition two years ago and so far allocated Rs 600 million for this purpose, only four exporters have received such incentives so far.
European buyers have also asked Nepali entrepreneurs to diversify their product line with more contemporary designs.
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