Nepali Times
Nation
Fading pashmina

BINOD BHATTARAI


It\'sa familiar story: a great Nepali export item rides an international fad, there is exponential growth, then a bandwagon effect as everyone tries to cash in. Government squeezes exporters, there is regulatory failure, a glut in the market, prices collapse, quality deteriorates, workers are laid off and the industry starts to go under. It could be carpets or garments, but now it is pashmina.

When the traditional soft shawls made from the neck fur of Himalayan goats took international fashion by storm four years ago, Nepali pashmina became a worldwide rage. Selling for upwards of $500 apiece, the stylish, colourful woollen wraparounds were seen on everyone from Queen Elizabeth to Hollywood starlets.
In Nepal, the industry employed over 50,000 people. At its peak in 1999, the country exported Rs 6.22 billion worth pashmina scarves, shawls, blankets, mufflers and even dressing gowns. The Mongolian cashmere wool came through Tibet and was mixed with synthetic and natural fibres. Last month pashmina became Nepal's single largest export item to India, and the third largest overseas export after readymade garments and carpets. But just when the industry had everything going for it, it bottomed out.

"If I had 100 percent orders this time last year, now its down to 2-3 percent," says Puspa Shrestha, Managing Director of Nepal Pashmina Industry, one of the top five exporters. "This used to be our busiest month-now I've stopped production awaiting new orders." And if the trend since January (see graph) continues, sales
could slide further.

What went wrong? The vagaries of international fashion are part of the story, but mostly, the reasons are internal: initial success led to a spurt of fly-by-night looms- the "wayside momo shop syndrome". They competed and undercut prices. Petty traders began to pass off woollen shawls as pashmina, over-production hurt quality, and suddenly pashmina shawls that sold in boutiques started appearing in flea markets.

A Rastra Bank study shows that the number of registered pashmina factories jumped from 25 in 1993 to 959 by 1999. There were many more unregistered factories, but a lot have closed down. The lack of market information and dumping cheap shawls in India to be re-exported with a "Nepal" label has tarnished our image. Harassment at customs, bribery to get permits and licenses took their toll. The fly-by-nights have by now folded up, and even the big players are feeling the crunch.

Shrestha has shut down his factory. He may open in June if he gets new orders. He says: "We've lost the up-market image that Nepali pashmina had internationally."


LATEST ISSUE
638
(11 JAN 2013 - 17 JAN 2013)


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