Economy, Business And Markets

Persian Carpet Overtaken by Competitors

Persian Carpet Overtaken by CompetitorsPersian Carpet Overtaken by Competitors

Hand-woven carpet is one of the most valuable non-oil export commodities of Iran and the sector is currently suffering from severe mismanagement and unreasonable regulations.

If earlier, the Persian carpet was the crown of the international rug market, in recent years Afghanistan, India, Nepal and Pakistan have intensified competition and overtaken it, the Persian daily Forsat-e Emrooz reported.

“It is now very difficult to catch up with them ... Wool is imported from Australia, New Zealand and South Korea, and China is where we get our silk from. Between 3.5 and 5 kilograms of each of these materials are needed to weave a square meter of carpet,” said Abdollah Bahrami, the head of the National Union of Cooperatives of Iran’s Carpet Manufacturers.

He added that each kilogram of silk costs close to $86 and the figure for wool is between $5 and $16.

“This is only part of the expenses. When added together, production costs amount to a considerable sum, which makes the Persian carpet much more expensive as compared to its rivals. This is yet another reason for its declining popularity,” said Bahrami.

Insurance coverage for carpet weavers was cut some two years ago and this, according to the official, has made matters worse, in that millions have decided to quit the job and so the industry has lost a major part of its workforce.

“Moreover, Iranian carpet designs as well as the color and color combinations do not measure up to the tastes of international customers. If Nepal and Turkey are now successful in the business, it is because they have combined traditional methods with modern designs,” he said.

The official noted that every six months, carpet producers worldwide print catalogues of their latest designs to introduce their products in international exhibitions and give the customers the option to order the carpet of their choice.

“Iranian producers still carry their rugs around with them. The rugs are either purchased or are returned to the country. This is the worst way to attend carpet exhibitions,” said Bahrami.

He said more than 70% of the carpet looms in the country lack the required standards and are mostly dilapidated after being used for years.

“What we need are metal looms made with the latest standards, which would give us carpets that match international quality evaluations,” said Bahrami.

“At present, Iran’s carpet ranks between 30th and 40th in the world, based on its quality and sales,” said Hojjat Qaragozlou, a carpet expert.

“In our country, there is no export incentives and high taxes are also imposed on businesspeople for attending exhibitions.”

Qaragozlou said the high price of the Iranian carpet is a major factor hindering exports.

“An Iranian six-square-meter carpet costs $2,600 to $3,500, but the same carpet in India costs close to $600 to $1,150,” he said.

“During the past few years, many talented Iranian rug designers and weavers have received job offers from rival countries. Since no one in the country valued their work and innovative ideas, they left the country. The infrastructure for the business in these countries has mostly been set up by Iranian artists and producers,” he said.

Qaragozlou is not optimistic about the future of the industry and says it is not within reason to start a business under the current market conditions.

According to IRNA, from the five categories of the country’s non-oil exports, Persian rugs and handicraft ranked last in the last Iranian year (ended March 19, 2016), with 12,000 tons of exports worth some $333 million. The figure indicates a 14% decline in value as compared to the previous year and accounts for only 0.8% of Iran’s non-oil trade.