Ministry of Commerce And Supplies - Enhanced Integrated ...

N T I S2010Index 2: World Market ConditionsTable 2.32Total World Export Value of Silver Jewelry, 2005-09 (US$1,000)2005 2006 2007 2008 20092,805,000 3,309,000 3,941,000 4,367,000 n/aNote: Data shown here are only for silver jewelry (7113.11).Price fluctuations may mostly reflect changes in the price of silver and do, therefore, not necessarily show atrend for the market for production steps undertaken in Nepal.Market Access Conditions (Tariffs and NTBs): Most major markets grant duty-free access to Nepalese silverjewelry. Tariff rates (for Nepal/MFN) for silver jewelry (7113.11) in some markets are: EU (free/2.5 per cent),US (free/5-13.5 per cent), Japan (free/6.2 per cent), Canada (free/5-8.5 per cent), and India (free/10 per cent).No specific NTBs have been reported by the interviewed companies, expect for the possible ban on silvercontaining cadmium, which is expected to be introduced by the EU and which would require testing andcertifying institutions.Major Competitors in World Market: The largest exporters are Thailand, Hong Kong, EU, China, and theUSA.World Market Prospect: The market for silver jewelry products is growing relatively fast. World exports havegrown by 14 per cent per annum between 2004 and 2008 by value (partly reflecting higher prices for silver),and by 9 per cent by volume.Index 3: Domestic Supply ConditionsProducers: According to the Federation of Handicrafts Association of Nepal, 527 firms and companies weredirectly involved in jewelry production and export in 2007/08 59 . All of these companies are owned by privateentrepreneurs and operate as small scale/cottage producers. Firms normally outsource jewelry production toindividual craftsmen in different villages who have in-house workshops.Production Capacity: At present annual production of silver jewelry is 15 to 20 MT. 60 On average eachcraftsman annually produces 5 kg of silver jewelry. 61 It is estimated that there are 6,700 craftsmen (FTEE)involved in production of silver jewelry and the annual production capacity is estimated at 50 MT. 62 Rawmaterials, in particular silver, have to be imported. It is estimated that the value added in Nepal is around 40-50 per cent of the export value.Quality of Product: Nepal is known for the high artistic quality of its jewelry. Recently, an issue of adulterationof silver with cadmium was raised and exporters have become cautious on possible adverse impact on futureexports.Productivity: Jewelry is fully handmade. Productivity and quality can be improved if production were furthermechanized.59Federation of Handicrafts Association of Nepal, Handicraft Trade Directory 2007/08, p. 280.60An estimate given by one of the leading exporters of jewelry to EU markets, Mr. Swoyambhu Ratna Tuladhar, Managing Director, Yak and YetiEnterprises Pvt Ltd., Kathmandu, Nepal. In 2008, the average world market price for 1 MT of silver was around US$ 0.5 million.61An estimate given by one of the leading exporters of jewelry to Japan, Mr. Suman Ratna Dhakhwa, Proprietor, Valhalla Enterprises, Lalitpur,Nepal62Nepal Gold and Silver Entrepreneurs Association and other industry sources.70NEPAL TRADE INTEGRATION STRATEGY 2010BACKGROUND REPORT