Economy, Business And Markets

Persian Rug Industry in Doldrums

Persian Rug Industry in DoldrumsPersian Rug Industry in Doldrums

The situation for the Persian hand-woven carpets is critical in terms of the value of exports. The number for the past Iranian year (ended March 20, 2014) stood at $314 million, the lowest in the past two decades.

Director of the National Carpet Center, Hamid Kargar, pointed last week to the US-led sanctions on export of Persian rugs to the United States as one of the most important reasons behind the decline in the export of rugs. The sanctions have been imposed on the industry over the past four years, causing a drop of about 25 percent in Persian handmade carpet exports, quoted Kargar as saying.

On the other hand, he said, sanctions and other reasons resulted in a rise in the all-in costs of Persian carpet production as the insurance and transport expenses increased.

What’s more, some external factors such as the economic stagnation in the European markets and the uprisings in the Arab countries of the region also affected the export of Iranian-made carpets. Besides, due to policies such as the subsidy reform plan and a direct injection of liquidity into the carpet weaving industry through cash payments, Persian carpet production has considerable decreased.

Kargar further added this is while the amount of carpet export in terms of weight has increased and it is hoped that an improvement of economic condition will accelerate this trend.

A major Persian carpet exporter to South America, Fakhreddin Amerian, stated recently, “The fact that Iran has lost its position as the largest handmade carpet producer in the world is an absolute disaster.” Persian carpet is one of the “best ambassadors” of the ancient Iranian culture and civilization, he added.

“For years, Persian carpet was the second most exported item after oil. Iran used to top the world in terms of production and export of handmade carpets, bringing about a billion dollars annually.”

“What we witness now is that this special industry is on the verge of collapse,” Amerian stated. Currently, India with over $1.5 billion of annual revenue from carpet export is ranked first in the world; a success that is the result of a strong support for the industry from the side of their government, he continued.

At the same time, the global market for hand-woven carpets itself faces a fluctuation in earnings between $1.2 and $1.5 billion. Iran has so far succeeded to maintain its share from the total handmade carpet trade, which is the largest share and is equal to 30% to 35% of the market, in the face of a rapidly growing number of international rivals.

Among other countries that have a hand in the carpet business, Pakistan, Afghanistan, Turkey, and Nepal stand out. At the same time, among the largest buyers, China has turned from a major producer into a significant importer of hand-woven carpets, which places it on the top of the list of the customers for Persian carpets.