Sunday, January 12, 2014

Overseas markets heading toward recovery Supply confidence still to regain

KATHMANDU, Jan 9: Unlike in the few past years, Nepali carpet exporters heading to Germany this week to participate in an international carpet fair there are more optimistic.

With high hopes of better promotion opportunities amid economic recovery in western markets, a Nepali delegation of carpet exporters left on Thursday for Germany to take part in Domotex Hannover -- the world’s largest carpet fair -- that starts next week.

The gradual recovery of European and American economies after years of slowdown has encouraged woolen carpet exporters who feel they finally have something to cheer about.

“Given the recovery in Western economies and an already impressive growth in exports of carpet, we are confident that we will see at least a 50 percent rise in exports this year compared to last year’s figures,” Anup Malla, the president of Nepal Carpet Exporters Association, told Republica.

After a few years of slackness, the government reported impressive rise in exports of carpet, Ready Made Garments (RMGs) and Pashmina – Nepal’s key export items.
Data shows that export of carpet, garment and Pashmina shot up remarkably by 46 percent, 54 percent and 26 percent respectively during the first four months of the current fiscal year, compared to the corresponding figures last year.

Around three dozen Nepali carpet exporters will take the opportunity to further promote high-end hand-knotted carpets amongst existing and potential buyers during the four-day Domotex that starts on January 11.

“We have established a special identity in the global market for hand-knotted carpets. We will take the opportunity to diversify our markets by approaching all kinds of buyers at the fair,” Malla said. Exports of carpet, which topped Nepal’s exports list a decade back, reached Rs 5.66 billion during Fiscal Year 2012/13.
During the height of the export boom, carpet exports touched an all-time high of Rs 10.4 billion during Fiscal Year 1999/2000.

“We have to overcome the perennial problems of shortage of workers, power crisis and political unrest to take advantage of the favorable overseas market for our products,” he added.

Garment entrepreneurs are also upbeat over their export prospects.

With a significant rise in demand for RMGs from overseas, deepening political unrest and concerns of worker pay and working conditions in Bangladesh, the second largest exporter of apparels after China, and strike by garment workers in Cambodia -- another leading exporter, have created more opportunities for reclaiming the market for Nepali garments.

Bangladesh, which has been suffering a huge decline in demand from Western buyers following accidents in garment factories that raised safety concerns, has also witnessed further setback due to ongoing political instability.

“Concern over garment security and the latest political unrest in major garment suppliers, Bangladesh and Cambodia can prompt international buyers to look for other suppliers. So, we can cash in on the opportunity,” said Uday Raj Pandey, the president of Garment Association Nepal (GAN).

Indications that Nepal’s own political scenario may improve in the coming days following the completion of Constituent Assembly (CA) election can create a favorable environment for Nepali entrepreneurs to promote production and export of garments.

Frequent strikes, bandas and other political activities in the past had forced global buyers to switch to other suppliers such as Bangladesh and Cambodia.
Issues like poor safety measures in garment factories and fresh political unrest have inflicted on the Bangladesh economy, which is highly dependant on exports of garments for foreign currency income.

Most of the major players in Bangladesh’s US$ 22 billion-garment industry have already shortened work shifts to eight hours from the usual 10 hours to cope with the unfavorable situation facing the country.

“December is usually a season when we are packed with orders to a point where we can’t take any more but look at this year - its a completely different story,” Muhammad Saiful Hoque, assistant general manager of Babylon Garments, was reported as saying by AFP news agency.

In the last three months, most of the leading garment exporters in Bangladesh have suffered around a 50 percent decline in overseas demands, AFP further reported. US giants such as Wal-Mart and GAP as well as British retailer Tesco are among the key buyers of garments.

“We have initiated dialogues with major buyers -- mainly US firms -- to push our garment in a bid to make a re-entry into Western markets,” said Pandey.
Pandey suggested that Nepali entrepreneurs intensify dialogue with US importers, resume operation of closed apparel factories and introduce a culture of sparing the garment industry from effects of political unrest, to revive the exports.

Frequent bandas and strikes as well as the phasing out of Duty-Free-Quota-Free (DFQF) entry facility by US government -- the largest buyer -- from 2004 hit the Nepali garment industry hard, pushing down significantly the export of textile and clothing, which was one of the largest spinners of foreign currencies.

In 2002/03, export of garment -- then the second-largest exported item after hand-knotted carpets -- reached an all-time high of over Rs 12 billion. During Fiscal Year 2012/13, garment exports stood at Rs 3.8 billion.

Different diplomatic efforts from Nepal could not secure any positive response from the US in the past to restore the DFQF facility for Nepali garments.

In a recent push for zero-tariff market access for Nepali products including garments, the Ministry of Commerce and Supplies (MoCS) a couple of months ago submitted a list of 100 products to the US authorities seeking Generalized System of Preference (GSP) facility -- which provides duty free access.

Export of Pashmina is also heading toward recovery with the introduction of a collective trade-mark for Chyangra Pashmina four years back.
Nepali Pashmina entrepreneurs have already registered trademark of Chyangra Pashmina in 39 countries and the process is on to get registered in four more countries -- the UAE, South Africa, Russia and Brazil.

“Gradual growth of Pashmina exports is an indication that this industry is heading toward recovery after decades of slowdown,” said Vijoy Kumar Gugar, the general secretary of Nepal Pashmina Industries Association (NPIA). Export of Pashmina reached its all-time high of Rs 5.26 billion in Fiscal Year 2000/01, while exports plummeted to Rs 2.17 billion during Fiscal Year 2012/13.

Dugar, however, said entrepreneurs are still to regain confidence to ensure timely delivery of products to overseas destinations.
“We are encouraged with the growing overseas demand for our Pashmina. At the same time, we are still not fully confident that we can make timely delivery as per requirement of buyers due to political uncertainty and lack of skilled workers in the country,” he said.


Published on 2014-01-09 23:53:48

No comments:

Post a Comment