Exports of garments, pashmina, carpets fall up to 47.7%

KATHMANDU, April 21:

Exports of readymade garments (RMGs), pashmina and woolen carpets to third countries have plunged by double digits as the economic crisis in the West, especially Europe, continues to eat into disposable income of consumers.

This problem faced by exporters has been further compounded by significant drop in exports of RMGs to India, which until lately was a growing market for Nepal.
Nepal´s RMG exports to third countries stood at Rs 1.93 billion in the first eight months of the current fiscal year, down 37 percent than in the same period last fiscal year, Nepal Rastra Bank (NRB), the central bank, said.

Traders said debt crisis in Europe, the major buyer of Nepali apparels, was the primary reason for sharp decline in garment exports.

RMG suppliers, who were upbeat when exports to India had started picking up couple of years ago, are also worried about prospects of exports to the southern neighbor because of slump in demand. Exports of RMGs to Asia´s third largest economy nosedived 66 percent to Rs 124.5 million in the eight-month period.

“Slowdown in European economies is the major factor behind continued decline in garment exports. At the same time, even Indian markets are becoming more competitive for Nepali exporters,” said Uday Raj Pandey, president of the Garment Association of Nepal.

Pandey, who is also an executive member of the Federation of Nepalese Chambers of Commerce and Industry, said deepening shortage of skilled workers in the country has also affected Nepal´s exports of RMG and carpets, making supply capacity weaker.

Exports of woolen carpets to countries other than India also tumbled 15.8 percent to Rs 3.87 billion in review period.

Decline in demand from Europe, the major buyer for Nepali hand-knotted carpets, also dragged down Nepal´s exports to the key market.

Despite double-digit fall in exports to major markets, carpet remained fourth largest export product of Nepal during the period.

Data compiled by the Trade and Export Promotion Center show Nepal exported 346,065 sq m of carpet worth Rs 3.43 billion during the eight-month period.

Exports of pashmina--another major exportable item--also dipped 47.7 percent to Rs 1.08 billion in the review period.

Though the government has recognized the collective trademark of Nepali Chyangra Pashmina to pave the way for its promotion in international markets, its exports has not gone up.

Carpet and RMG are listed in Nepal Trade and Integration Strategy 2010, the government´s export promotion roadmap. India, which itself is exporter of woolen pashmina, has bought Nepali pashmina worth Rs 35.4 million in the first eight months of the current fiscal year, up 44 percent than in the same period last year.

During the late 1990s to early 2000s Nepal´s pashmina exports had reached its peak.

Keeping in view the export potential of pashmina, the International Trading Center--a joint agency of the World Trade Organization and the United Nations--has pledged to extend US$1.42 million (Rs 128.16 million) to promote production and exports of pashmina under the Pashmina Enhancement and Trade Support Project.

Source: Republica