Rallying greenback drags down pashmina sales

KATHMANDU, May 26: Though depreciation of Nepali rupee vis-a-vis US dollar brought short term gains, exporters expressed worry over their longer-term business prospect as rising cost of imported raw materials has rendered their products expensive, dragging down their sales in domestic as well as international market in the recent weeks.



“Pashmina sales in the domestic market has dropped by over 25 percent during the past two weeks compared to normal time due to a price hike fueled by a stronger dollar,” Pushpa Man Shrestha, president of Nepal Pashmina Industries Association (NPIA) told Republca.[breaak]



Domestic sales of pashmina is estimated to hover around 50 percent of its total exports to the overseas makets. According to Trade and Export Promotion Center (TEPC), pashmina worth Rs 1.63 billion was exported during the fiscal year 2010/11. Around 500 shops across the country sell export quality pashmina to tourists and domestic buyers.



“The rising strength of US dollar vis-à-vis Nepali rupee has already jacked up the cost of pashmina production by around 15 percent. The demands from international buyers are bound to tumble further if this trend continues as it will weaken our competitiveness,” said Shrestha.



According to him, international buyers have expressed concern in view of the political unrest in the country. “We have been assuring the buyers of timely delivery of goods by allaying their fears about the effects of political uncertainty in the country,” he said.



Producers and exporters of carpet, the fourth largest export item, however, said they have not suffered any impact on account of strengthening US dollar as wool--the major raw material for carpet-are being imported by paying in New Zealand dollar, which has depreciated against Nepali rupees.



“Till now we have benefited with the decreasing value of New Zealand dollar against Nepali currency which has resulted in lower cost of production and higher export bill,” said Gopal Krishna Joshi, former vice-president of Central Carpet Producers Association.



Out of the total imports of wool for carpet, more than 70 percent comes from New Zealand and the remaining from China. Export of carpet was recorded at Rs 4.92 billion during the fiscal year 2010/11, up from Rs 4.25 billion a year earlier.

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