Drastic Decline in Handmade Carpet Exports

EghtesadOnline: Iran exported $40 million worth of hand-woven carpets in the first eight months of the current Iranian year (March 21-Nov. 21, 2019).

News ID: ۷۴۹۶۰۷

03 February 2020

The export volume is a 10th of last year’s figure, according to the CEO of Iran’s National Handmade Carpet Producers Union.

Abdollah Bahrami also told Mizan Online that the regulation mandating traders to repatriate their foreign currency export revenues and the carpet production raw material price hike that increased end prices of the product are among the main reasons for the drastic fall in export figures, according to Financial Tribune.

As per the directive devised in the wake of a currency crisis in Iran last year, the government has obliged all exporters to repatriate their foreign currency yields into the economic cycle of the country at prices set lower than free market rates.

The move is aimed at boosting strained currency reserves, at least in the short run, under increasingly harsh conditions. But it has understandably received negative feedback from private sector players.

“Though the sanctions cost us the $100 million US market, we could have compensated that amount in other ways. But the abovementioned problems prevented that,” Bahrami said.

The official added that because of higher prices, local customers are also reluctant to make purchases.

According to Bahrami, the UAE, China, Germany and South American nations are the main customers of Iranian hand-woven carpets.

Fereshteh Dastpak, the former head of Iran National Carpet Center, said two months ago that plans are underway to establish a barter system to trade Persian hand-woven carpets for other commodities.

She said China, a major buyer of Persian handmade carpets, has expressed its readiness to apply such a system to import Iranian carpets in exchange for subway wagons. Sweden and Russia have also offered to trade Iranian carpets for a range of other commodities.

“The product has always been among the top three non-oil export commodities of Iran 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.

According to the official, more than 95% of raw materials to produce hand-woven carpets in Iran are produced domestically.

Dastpak noted that Iran imports 90% of the silk it needs to produce carpet from China.