Carpet, yarn, textile and large cardamom lead exportExport earnings from goods identified by the Nepal Trade Integration Strategy amounted to Rs48.11 billion in fiscal 2022-23.
Nepal’s exports of high-value products rose sharply by 25.24 percent in the last fiscal year, largely due to a rise in shipments of woollen carpet, yarn, textile and large cardamom.
Export earnings from goods identified by the Nepal Trade Integration Strategy (NTIS) swelled to Rs48.11 billion in fiscal 2022-23 from Rs38.41 billion in the previous fiscal 2021-22, according to the Department of Customs.
Nepal's revenues from exports were up by Rs9.69 billion, but experts say the rise is more due to inflation, which made everything more expensive, than an increase in shipments.
“Demand for Nepali products increased especially in the United States and Europe post-Covid,” said Krishna Raj Bajgain, senior officer at the Trade Statistics and Analysis Section of the Trade and Export Promotion Centre.
"Exports of quality products and diversification in designs helped push up demand," said Bajgain.
The shipments of most products recorded new highs. Yarn exports in the last fiscal year increased by 10.58 percent year-on-year to hit a record Rs12.19 billion.
India is the largest importer of Nepali yarns. The largest producers are Reliance Spinning, Triveni Spinning and Jagdamba Spinning.
The largest shipments went to the Indian states of Punjab and Assam. The cities of Siliguri, Gorakhpur and New Delhi were also major buyers of Nepali yarn.
Woollen carpets were the second largest export after yarns, recording a steep 20.86 percent year-on-year rise to Rs11.56 billion. Insiders say that the jump in carpet exports is a sign that the iconic industry is making a strong rebound.
“Nepali carpets are selling more due to the use of the latest custom designs and expensive yarn like Chinese silk and pashmina,” Ram Bahadur Gurung, president of the Nepal Carpet Manufacturers and Exporters Association, told the Post in a recent interview.
“Orders from international buyers are rising, especially from the big players in the US and European markets.”
According to exporters and manufacturers, the combined effect of inflationary pressure and costlier raw materials has increased the export price of Nepali carpets. But there has also been a rise in volume, which means that carpet industry is definitely making a big comeback.
Nepali traders say that supply chain disruptions in the last three years due to the Covid pandemic led to a rise in demand for Nepali carpets in overseas markets.
Carpets were once one of the country's leading exports. In the 1990s, the industry boomed and became a major source of foreign currency.
According to a report published by the International Labour Organisation, Nepal’s carpet industry provided 250,000 to 300,000 jobs during its “Gold Rush” period in the early 1990s.
Carpets then accounted for 65 percent of the country's total exports. The Gold Rush period opened up new opportunities for the poorest of the poor on a massive scale, according to the report.
The carpet industry was one of the most prominent sectors with a remittance economy that benefited rural communities, alluring large numbers of people from remote districts to Kathmandu. The industry subsequently went into decline before making a recovery in recent years.
Large cardamom emerged as the third largest export after yarn and carpet, and the number one export among agricultural products.
Exports of large cardamom, one of the world’s most expensive spices, soared by 71.94 percent to Rs8.27 billion in the last fiscal. Shipments of large cardamom from Nepal totalled 9,990 tonnes.
“The production of large cardamom increased by 50 percent due to the use of new saplings, expansion of cardamom farming to other parts of the country besides the eastern hilly districts and favourable weather,” said Nirmal Bhattarai, president of the Large Cardamom Entrepreneurs Association of Nepal.
"This contributed to the export growth of large cardamom."
The price of large cardamom has been fluctuating in the range of Rs700 to Rs1,000 per kg. More than 90 percent of the large cardamom grown in Nepal is exported to India, traders said. The spice is also sent to Pakistan.
Textile shipments rose by 45.77 percent to Rs4.77 billion in the last fiscal year to become Nepal's fourth largest export item.
Tea exports jumped to Rs3.92 billion, up 12.72 percent year-on-year. Demand for Nepali tea is rising in the Indian market as production has slipped across the border.
According to Indian media reports, tea production in India has declined as a result of climate change, labour problems, low productivity and low profitability. Whenever tea production in India falls, demand for Nepali tea soars, said domestic tea traders.
Nepal's pashmina exports in the last fiscal year also increased, recording a 15.17 percent rise to Rs3.24 billion.
On February 7, the National Pashmina Sector Export Strategy 2022-26 was launched with an aim to boost shipments of “Chyangra pashmina” from Rs2.82 billion in 2021 to $75 million or Rs10 billion by the end of 2026.
The export of medicinal herbs increased by 11.80 percent to Rs1.90 billion in the last fiscal year. Nepal exported medicinal herbs mainly to India followed by Hong Kong and Cambodia.
The export of ginger increased sharply by 90.54 percent to Rs1.22 billion in the last fiscal year. Nepal exported 23,013 tonnes of ginger in the last fiscal year.
Domestic traders said that high demand and low production resulted in record high prices of ginger in the last fiscal year. Exports of the spice to India almost doubled due to poor harvests in the southern neighbour, traders said.
Ginger farmers of Dhankuta who were selling their harvest for Rs40 per kg in the previous year were able to get Rs250 per kg in the last fiscal year.
Nepal is one of the world’s largest producers of ginger. More than 98 percent of Nepali ginger is dispatched to the southern neighbour.
Footwear was the only NTIS product to show a drop in the last fiscal year. Shipments fell by 12.46 percent to Rs990.84 million. Nepal exports footwear to India.