Gold price surges to touch 5-yr high

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KATHMANDU, March 4 : Spurred by the soaring international gold price, in addition to the tumbling Nepali rupee, the price of gold in the domestic market has climbed once again to touch the highest point in the last five years.

The domestic gold price, which was hovering at around Rs 7,840 per ten gram last week, surged to touch Rs 7,900 per ten gram today. The highest gold price observed during the last five years was Rs 7,970 in November 1996. An all time high was witnessed on 8 February 1996, when the market gold price touched Rs 9,040 per ten gram.

The international gold price, which had been soaring since the last couple of days recorded another unprecedented jump today to touch almost US$ 299.55 per troy ounce (1 troy ounce=31.103 gms) from around US$ 295.90 last week.

Gold traders predict that the international gold price may touch US$ 300 per troy ounce Tuesday resulting in a surge in domestic gold price to Rs 7,920 per ten gram. A dollar increase in gold price leads to a corresponding increase of Rs 20 per ten grams in the domestic market.

Gold traders attribute the slackness in the global stock market and fledging Japanese economy as the major reasons behind its price hike. Eroded confidence on stock is prompting investors to turn to gold as the best alternative for investment.

Similarly, the series of depreciation of the domestic currency against the American dollar is another major reason behind the price surge. The Nepali currency has depreciated by 1.3 percent in 2002 against the greenback. Since Nepal imports all yellow metal by paying in convertible currency, any slide in the value of the Nepali currency directly leads the price to rise.

However, the impact of the gold price hike on the domestic gold market this time has been different from the past trends, thanks to the ongoing wedding season, during which gold demand surges. "The overall gold demand has increased as compared to the last month’s figure due to the wedding season," says Tej Ratna Shakya, President of Nepal Gold-Silver Dealers Association.

However, in the same breath, he reiterated that the current high demand would be short-lived as the wedding season will end soon. "The actual market condition would than be visible only then," he added.

During the similar unexpected last month’s upheavals, the average daily demand of gold had plunged to remain at less than half the normal demand. According to the concerned entrepreneurs, the average normal national demand of gold in Nepal stands at 30 kg per day.

However, gold dealers are in a dilemma since high demand for fresh gold is simultaneously accompanied by people’s heavy turnout to sell their old gold stock and ornaments.

"The transaction of old gold currently stands at around 35 per cent of the total gold transaction due to which we are increasingly facing difficulties in making hard currency against the sale of old gold stock and ornaments," says Niranjan Shakya, former president of Nepal gold-Silver Dealers Association.

He further said that gold traders have already started facing a cash-crunch situation due to the recent trend. "Gold traders need to think on alternatives to withstand the new challenge," he added, indicating a possible down revision in the current purchasing price of gold to discourage consumers to sell-out their old gold stock.

Experts stress on enhancing quality of Nepali pashmina

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KATHMANDU, March 4 : Speakers at an interaction programme today stressed for producing high quality pashmina in an environment friendly manner and urged the private entrepreneurs to enhance their production capacity to revive the slumping pashmina exports.

"As Nepali pashmina is exported to countries where green consumerism has gained ground, environmental labelling certification is the demand of the market and plays an important role in capturing the market," said Poorna Prasad Manandhar, Director General of Nepal Bureau of Standards and Metrology (NBSM).

He was speaking at an interaction programme on "Quality and Environmental Labelling for Pashmina Industries" organised jointly by the NBSM, Environmental Labelling Project for Export Industries in Nepal (ELPEIN) and Nepal Pashmina Industries Association (NPIA) on Monday.

Manandhar further asked the pashmina producers and exporters to pursue the demand of the international market and make efforts to meet environmental labelling requirement.

In the same vein, Asko Luukkainen, Charge d’ Affaires of Embassy of Finland, said that enhancement of local institutional and technical capability along with the knowledge of producers and exporters is a key to finding lucrative markets.

"Recuperating the quality and addressing environmental issues during the production process alone can improve the deteriorating exports scenario of pashmina," he stressed.

Pushpa Raj Shrestha, Chief Technical Advisor of the ELPEIN, stressed for quality and environmental planning for improving productivity and competitiveness of the Nepali pashmina products.

However, he lamented that the pashmina entrepreneurs lack mechanism of information flow and are largely unaware of international business policies and demand.

Meanwhile, highlighting the activities of the ELPEIN, Shree Krishna Shrestha, Deputy Director General of the NBSM, said that it conducted activities like awareness development programmes for pashmina manufacturers, imparted training, provided technical supports and helped in correcting the technical methods reducing the cost of production.

"It even provided 50 percent subsidy on cost incurred while acquiring Environmental Labelling Certification from Oko-Tex 100, the Switzerland based institution," he said, adding that as of now, 3 carpet industries and 1 pashmina industry has already acquired the Environmental Labelling Certificate from Oko-Tex 100.

He informed that the three-year ELPEIN run by the government with Finnish assistance would mature in August 2002. It had budget earmarked at Rs 51.1 million, he said.

Shanker Pandey, President of NPIA, expressed concern over tumbling pashmina exports. However, he held optimism that the same could be revived if concerned entrepreneurs take necessary measures to maintain quality, competitiveness and international contacts.

The export of Pashmina has recorded a massive decline by over 80 per cent during the first half of the current fiscal year. The pashmina export during the period stood at Rs 916.03 million in the first six months of the current fiscal year against Rs 4.65 billion recorded during the same period last year.

Study on tourism reveals lapses

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KATHMANDU, March 4 : Amid dwindling inflow of tourists into the country that so far have been attributed to a number of domestic and international events, a new study suggests that unprofessional Nepali marketing is one of the major reasons behind the tourism slump.

According to a report on "Nepal marketing Concept for German Market", the other major reasons for the current slump in the Nepali tourism sector is the increasing fierce global competition and the limitation of infrastructure in Nepal.

Lars Bengsch and Dr Mathias Feige for Private Sector Promotion Project of German Technical Cooperation (GTZ) conducted the study. The report has, at the same time, identified Nepali landscape and hospitality as the major attraction for the German travelers.

The report has traced trekking and cultural trips as the Nepali products to market in the German market. Besides, rafting, mountain biking and climbing, among others, are other areas of German interest.

The report has proposed some measures for marketing that includes dissemination of tourism information and photos regularly, creation of updated list of tour operators, distribution of newsletters and catalogues, among others.

The GTZ study has suggested revising the entrance fees, implementing the revised visa fees and establishing new flight connections to the European sector. During last year a total of 18, 629 German tourists had come to visit Nepal, which was down 18 per cent compared to previous year.

‘Treaty’s spirit is intact’

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KATHMANDU, March 4 : Businessmen and economists say that the recently signed Nepal-India Trade Treaty has not hurt the spirit of the Treaty signed in 1996, but it has prompted Nepal to formulate a comprehensive industrial policy that can address the emerging problems.

Padma Jyoti, President of SAARC Chamber of Commerce, has said that the spirit of the Treaty of 1996 is intact and it has systemized the provision on export surge. Rather the treaty has necessitated the enactment of anti-dumping laws to safeguard domestic industries from import surge, he said.

He also said that the value addition formula is acceptable to both sides and the new provisions are not extraordinary and unexpected. However, he said that the quantitative restriction imposed on copper products is unjust, adding that the implementation of the treaty is not an easy job. He was speaking at an interaction among business community organized by the Reporter’s Club Nepal here today.

Rajesh Kaji Shrestha, President of Nepal Chamber of Commerce (NCC), appreciating the role of the Nepali delegates said that various duties imposed by individual states of India on Nepali exports and the special additional duty (SAD) should be removed.

Dr Bishowmbhar Pyakuryal, a noted economist, expressed the views that the Treaty in its entirety is positive and pointed out the need to make the upcoming long-term industrial policy a comprehensive one, so that it could address issues that emerge in the bilateral trade.

He also suggested the government to establish a permanent technical committee at different ministries in order to keep updated data to assist in enhancing the bargaining capacity of the Nepali team. He also said that Nepal should be vigilant in implementing the Treaty.

Arun Kumar Chaudhary, President of Nepal-India Chamber of Commerce and Industry (NICCI), termed the newly signed Treaty as a "very significant" instrument.

However, he said that the treaty has shown that small problems can shake the foundation of Nepal’s industrial base and thus Nepal should be careful about it.

Binod Bahadur Shrestha, Acting President of Federation of Nepalese Chambers of Commerce and Industry (FNCCI), and Industrialist Diwakar Golchha also expressed their views on the occasion.