KATHMANDU, Dec 26: Thanks to upcoming new year Lhosar, which falls on February 22, 2012, Nepali hand-woven carpet has found a ready market in Tibet at a time when demand from traditional markets like Europe and US has been on a downslide.
Impressive growth in demand from the northern neighbor has given a new lease of life to the Nepali carpet industry that has been struggling to survive amid shrinking market in Europe that still accounts for over 70 percent of the total carpet export from Nepal.
“To the relief of Nepali exporters, who are on the receiving end of a subdued demand from European markets, Nepali carpet has found a good market in Tibet that is also offering better price compared to European buyers. Upcoming Lohsar festival in Tibet has driven up demand for Nepali carpet,” Gopal Krishna Joshi, Second Vice-president of Central Carpet Industries Association, told Republica on Sunday.
Joshi said carpets that are being exported to Tibet are fetching Rs 11,000 to Rs 22,000 per piece, depending on size and quality. The Tibetan price range is better than what is being offered by European buyers.
“Though demand from Tibet will be for a limited period only, this opportunity is a great relief,” Joshi added. He said over a dozen exporters have started production and export of carpets woven in Tibetan designs. However, he couldn´t provide the exact quantity of demand placed by Tibet for Nepali carpet.
In a bid to diversify the international market, which is getting volatile and uncertain, exporters have already started to target other emerging buyers such as Brazil, Turkey, Japan and Gulf countries. However, traders said the number of manufacturers has continued to decline amid rising cost of production boosted by increasing price of wool - the key raw material - and labor cost.
“Manufacturers are increasingly getting into exports themselves. Rather, many of them opt to outsource production to avoid problems associated with running a factory,” said Bijay Bahadur Bista, First Vice-president of the association. Around 200 exporters and 25 manufacturer-exporters are currently supplying Nepali carpet to overseas market.
According to traders, production of per square meter of carpet has shot up by Rs 1,200 to Rs 4,800 and Rs 8,000, depending on the quality due to rise in wages, price of wool and cotton yarn. The production cost has gone up by over 30 to 40 percent over the last year.
Over the last year, price of wool and cotton yarn has risen to Rs 500 and Rs 165 from Rs 230 to Rs 105 per kg respectively. Minimum wages have also gone up by Rs 1,500 a month.
With the rise in production cost, export price of carpet has gone up by 33 percent per square meter to Rs 7,220 during the first three months of the current fiscal year 2011/12 compared to the same period last year.
However, the volume of export has dropped by around 5 percent to 238,936 square meters though the export in terms of value has grown by 27 percent during the period compared to the corresponding period last year.