Data released by Federation of Handicraft Association of Nepal (FHAN) show, Nepal exported silver crafts and jewelries worth Rs 167.95 million over the first nine months of 2011/12, down from Rs 247.64 million recorded in the same period last year.[break]
Although regarded as one of the highly potential export items in late 1990s, craftsmen lamented that they have been facing a consistent drop in exports over the past decade. As a result, many of the entrepreneurs have quit business and entered in the service industry.
"Rapid fluctuation in silver prices, rumors of cadmium residue in silver jewelry and lack of investment friendly environment have cost us dearly," said Swoyambhu Ratna Tuladhar, CEO of Yak and Yeti Enterprises -- a leading exporter of silver jewelries that is in the business for more than two decades.
Failure of the industry to adopt new technology that can support mass production and increase in labor costs attributed to shortage of craftsmen are other major reasons behind the gloomy exports.
According to Tuladhar, they had received significant orders for silver items, even though European countries - the major importers are in recession, in the earlier months of fiscal year. "But we failed to fulfill the demand because of inadequate craftsmen and also the traditional production system, which takes longer time for production," he told Republica.
Consequently, this lack of timely delivery has affected receipts of fresh orders.
In a bid to enhance supply capacity, entrepreneurs said they have long been lobbying for the modernization of the production system and have been pressing the government to provide them duty incentives while importing new technology. "But our call has fallen in deaf ears," said Manmohan Sing Malla, proprietor of MQS Enterprises, adding that high bank interest rates and lack of investment friendly environment have hindered the entrepreneurs from investing into the sector.
Exports of silver jewelries had started decreasing after rumors of cadmium residue in Nepali silver products started making rounds in the major markets. Not only the exports, traders say sale of silver jewelries have gone down even in domestic market owing to rise in silver prices.
Nepal exports silver handicraft to more than 40 countries, including US, Japan, Canada, the UK, France, Italy, Tibet, Denmark and China.
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