Handmade Carpet Exports Expected to Reach $50m in Fiscal 2021-22

EghtesadOnline: Iran’s handmade carper exports are expected to reach $50 million by the end of the current Iranian year (March 20, 2022), says Morteza Miri, a member of Handmade Carpet Manufacturers and Exporters Union’s board of directors.

News ID: ۷۸۷۵۶۹

05 January 2022

“The figure is $15 million lower than last year’s exports. A total of $39 million worth of carpets weighing 2,500 tons were exported in the first eight months of the current [Iranian] year [March 21-Dec. 21],” he was also quoted as saying by the news portal of Iran’s Chamber of Commerce, Industries, Mines and Agriculture.

The Islamic Republic of Iran Customs Administration’s data show handmade carpet export reached its peak in the fiscal 1993-94 with $2 billion but as of the fiscal 2018-19, a downtrend started and reached $70 million in the fiscal 2019-20 and $50 million in the fiscal 2020-21.

Miri noted that the decline in carpet exports is due to sanctions and domestic decisions.

“For example, problems related to money transfer, presence in international markets and transportation are due to the imposition of sanctions, while domestic decisions such as export earning repatriation policy created problems for traders,” he added.

The official was referring to the Central Bank of Iran’s mandate that exporters are required to bring home their earnings from exports and sell their foreign currencies in the secondary market designed by the regulator at prices lower than market rates. Currencies sold in the secondary market, locally known as Nima, are used to import and build currency reserves.

Tehran is hosting the 29th Iran Handmade Carpet Exhibition that opened on Jan. 2 and concludes today.

The expo was initially scheduled to be held on Aug. 23-29, but it was delayed due to the Covid-19 pandemic.

“Exports of hand-woven carpets have been on a constant decline, except for the early years after the Islamic Revolution, which is indicative of the fact that the policies employed by subsequent governments regarding the carpet industry have been the same,” Razi Haji-Aqamiri, a member of Tehran Chamber of Commerce, Industries, Mines and Agriculture, was recently quoted as saying.

“Such a neglectful approach is not restricted to carpet; it is evident in other non-oil products, with the exception of some consumer items, thanks to foreign demand. All in all, the country’s conditions, approaches employed by the government and restrictions imposed by sanctions are not desirable for exports,” he said.

The official noted that old, traditional markets of Persian carpets have all but disappeared; carpet is a cultural product that needs long-term marketing.

“You can’t replace markets such as those of the US and Europe with China and Malaysia over four, five or even 10 years. Persian carpets have been in the US and Europe for over 200 years. Furthermore, marketing for Persian carpet requires great investment to pay off and these expenses are beyond the means of the private sector. The government should seek to create markets via long-term advertising plans and strategies. The revival of lost markets is virtually impossible and the government doesn’t seem to be motivated enough to spend at the present juncture,” he added.

Haji-Aqamiri stressed that none of the governments has stuck to plans and laws for long, which is a deadly virus for the economy, particularly exports.

“At present, a handful of producers are in the business of making high-priced carpets; they are making sales to some extent but generally there are no carpet exports. The export of Persian carpet is dead,” he said.

Elaborating on the collapse of carpet trading in the international markets, the official said, “The status of carpet has shifted in the global markets. These changes have harmed Persian carpet more than those of other countries. Today, interior designers are less inclined to recommend decorating areas with hand-knitted rugs. Carpet flooring is not as popular now as it was in the past. But it is important to account for a great share of this small market. Imagine that the total value of hand-woven carpet market is $3 billion; it is a huge difference between accounting for $2 billion of this market, or $200 million. It is up to us to grab a higher share and not to hand over the market to rivals like Turkey, India and Pakistan.”

Haji-Aqamiri concluded that sanctions have weakened the position of Persian carpets in the global markets and “customers have forgotten about us due to our absence in the market”.