Decline in Exports of Iranian Hand-Woven Carpets

EghtesadOnline: Iran exported $176 million worth of hand-woven carpets during the first seven months of the current Iranian year (March 21-Oct. 22), which shows a 20% fall compared with the similar period of last year.

News ID: ۷۴۶۲۹۶

04 December 2018

“Some 32% of our handmade carpets used to go to the US. We have now lost that market due to the reimposition of sanctions against our country,” Chairwoman of Iran National Carpet Center Fereshteh Dastpak was quoted as saying by Mehr News Agency.

The official noted that new markets need to be replaced with the US to compensate for the decline in exports.

According to Dastpak, about 80% of hand-woven carpets produced in Iran are exported annually, Financial Tribune reported.

Iranian carpets, she added, have many clients across the world and no individual or country can eliminate them from the international markets. The history of Iranian handmade carpets dates back to thousands of years and throughout these years it has managed to maintain its status despite political and economic upheavals.

The official noted that carpets have always been among Iran's top three non-oil exports even through the worst years experienced by the country's economy.

"Handmade carpets are deemed Iran’s second flag and a symbol of Iranian identity and culture,” she said.

Dastpak added that with enough tact, producers and exporters can preserve and further expand their foothold in the global markets.

"Some 2.5 million people in Iran are one way or another engaged in the carpet industry," she said.

In the last fiscal year (ended March 20, 2018), according to the Islamic Republic of Iran Customs Administration, Iran's handmade carpet exports stood at 5,400 tons worth $424 million to register an increase of 18.11% in value compared with the year before.

The US, Germany, Lebanon, the UK and China were the biggest customers of Iran. Italy, Switzerland, the UAE, Kuwait and Qatar are other traditional buyers of Iranian carpets.

Persian hand-woven carpets are exported to about 80 countries.

International economic sanctions imposed on Iran over its nuclear energy program dealt a heavy blow to Iran's carpet industry.

However, with the removal of sanctions as of early 2016 as part of the nuclear deal Iran signed with world powers a year earlier, trade began to normalize.

The United States, prior to sanctions, was the biggest importer of Iranian carpets.

After the 2016 removal of sanctions, exports to the US, which used to import $80 million worth of Iranian rugs annually, resumed after five to six years of “zero” shipments to the country.

Iran exported over $97 million worth of handmade carpets to the US alone in the fiscal 2016-17.

The sanctions also hit the Iranian carpet by increasing the costs of production, raising export risks and complicating the process of transactions.

Economic recession in some of Iran’s target markets in Europe also affected carpet exports, as these countries stopped buying because of lower purchasing power.

Change in lifestyle and taste, emergence of new types of flooring, domestic inflation and high costs of raw materials are also among challenges facing the Iranian hand-woven carpet industry.

With the reimposition of new restrictions, after US President Donald Trump left the multilateral nuclear deal in May, Iran is looking to diversify its export markets.

Hamid Kargar, former chairman of Iran National Carpet Center, said in April that new customers have emerged in recent years, namely China, Russia, South Africa and some Latin American countries

India, Pakistan, Turkey, Nepal and Afghanistan are said to be the main rivals of Iranian carpets in world markets.