Amu Presentation about silk agri business

Silworm

1. Introduction to Silk Silk, A natural protein fiber Be woven into textiles Composed mainly of fibroin Triangular prism-like structure of the silk fibre , which allows silk cloth to refract incoming light at different angles, thus producing different colors The best-known silk is obtained from the cocoons of the larvae of the mulberry silkworm Bombyx mori Silk use in fabric was first developed in ancient China (Shelagh, 2004) It is known as Resham in eastern and north India, and Pattu in southern parts of India. India is the second largest producer of silk in the world after China. Silk fiber are also made up of bamboo, cotton, hemp, banana etc. besides silkworm.

2. नेपालमा जापानद्वारा सन १९६९ बाटै रेशम उद्योगको क्षेत्रमा बिभिन्न किसिमा सहयोग, सहकार्य, अनुसन्धान र परामर्श आइरहेको छ । JICA (Japan International Co-operation Agency) र नेपाल सरकार द्वारा स्थापित SDO (Sericulture Development Office) अन्तर्गत गहन अध्यान पश्चात रेशम खेति नेपालमा उपयुक्त भएको, हावापानी मिलेको र रास्ट्रिय रेशमखेती नीतिको खाका तयार पारेका थिए तर सो नीति पारित भई कार्यनोयनमा आएको देखिदैन (JICA, 2011) ।

3. Countries 2015 2016 2017 2018 2019 2020 2021 Bangladesh 44 44 41 41 41 41 41 Brazil 600 650 600 650 469 377 373 Bulgaria 8 9 10 10 10 10 9 China 170000 158400 142000 120000 68600 53359 46700 Japan 1 1 1 1 Egypt 1 1 1 1 2 2 2 India 28523 30348 31906 35261 35820 33770 34903 Indonesia 8 4 3 3 3 3 3 Iran 120 125 120 110 227 270 272 Japan 30 32 20 20 16 16 10 Madagascar 5 6 7 7 8 8 8 North Korea 350 365 365 350 370 370 370 Romania 1 1 1 Philippines 1 2 2 2 2 2 2 South Korea 1 1 1 1 1 1 1 Syria 1 1 1 Thailand 698 712 680 680 700 520 503 Tunisia 3 2 2 2 2 2 2 Turkey 30 32 30 30 5 5 5 Uganda 3 3 3 Uzbekistan 1200 1256 1200 1800 2037 2037 2037 vietnam 450 523 520 680 795 969 1067 Total 202073 192512 177508 159648 109114 91768 86314 Global Silk Production (In Metric Tonnes ) Source: International Sericultural commission, 2022

4. Silk production in Nepal Source: MoALD , 2022

5. Overview of global silk market * CAGR: Compound Annual Growth Rate The Top Exporter of silk all over the globe is China (the US $ 945 Mn) and the top Importer is Italy (US $ 322 Mn)

6. Annual Import of Silk Commodities by Nepal In Fiscal year 2078/79 B.S. Based on Annual data of FY 2078/79 (Mid July 2021 to Mid July 2022) (Import Value and Imports Revenue are in Rs. Thousands) HSCode Description Unit Quantity Imports_Value Imports_Revenue 42060000 Articles of gut(other than silkworm gut),or goldbeater's skin,of bladders or of PCS 11618 171 51 50010000 Silk-worm cocoons suitable for reeling Kg 20 49 6 50020000 Raw silk (not thrown) Kg 8687 19196 3581 50030000 Silk waste (including cocoons unsuitable for reeling,yarn waste and garnetted sto Kg 431 1012 189 50040000 Silk yarn (excl spun from silk waste), no t put up for retail sale Kg 149084 356543 66094 50050000 Yarn spun from silk waste, not put up for etail sale Kg 131472 371584 66015 50060000 Silk yarn & yarn spun from silk waste, put up for retail sale; silk-worm gut Kg 7058 20065 3725 50071000 Woven fabrics of noil silk SQM 7754 12144 218 50072000 Woven fabrics of silk,containing>=85% weig t of silk/of silk waste other than no SQM 24232 38953 825 50079000 Woven fabrics, containing <85% weight of s lk or of silk waste SQM 141230 24443 6401 62061000 Women's or girls' blouses, shirts, shirt-b ouse of silk or silk waste PCS 17512 3667 1309 62141000 Shawls, scarves, mufflers, mantillas, veil , etc, of silk or silk waste. PCS 3899941 115645 41888 62151000 Ties, bow ties and cravats of silk or silk waste PCS 403496 18906 7144 120503965 28130198 NRs. 1 Kharba 20 Arba 50 Crore 39 Lakh 65 Thousand Only

7. Export and trade deficit of silk commodities by Nepal In Fiscal year 2078/79 B.S. Based on Annual data of FY 2078/79 (Mid July 2021 to Mid July 2022) (Exports Value are in Rs. Thousands) HSCode Description Unit Quantity Exports_Value 62061000 Women's or girls' blouses, shirts, shirt-b ouse of silk or silk waste PCS 36490 37642 62141000 Shawls, scarves, mufflers, mantillas, veil , etc, of silk or silk waste. PCS 28358 35952 134683 Trade deficit = - 1,20,36,92,82,000 (Negative) NRs. 1 Kharba 20 Arba 36 crore 92 lakh 82 Thousand only Source: Department of custom, 2022 NRs. 13 Crore 46 Lakh 83 Thousand Only

8. Recent trade status of Silk commodities in Nepal Based on 1 st three Shrawn-Ashoj FY 2079/80 Source: Department of custom, 2022 Total Import items: 9, Total Import value: 22,66,72,66,000/- (NRs. 22 Arba 66 Crore 72 lakh 66 Thousand only.) Total Export items: 2, Total Export value: 66,36,000/- (NRs. 66 Lakh 36 Thousand Rupees only) Total Trade deficit: -22,66,06,30,000/- (NRs. -22 Arba 66 crore 6 lakh 30 Thousand only)

9. Nepali News Article of Silk Trade Demand recorded to be 250 ton of silk, however only 2 ton being supplied from south India and China. (A/c to Contemporaneous SAN (Silk Association of Nepal) President Mr. Shankar prasad Pandey A/c to Contemporaneous FHAN (Federation of Handicraft association of Nepal) President Mr Pushkar Man Shakya, Sericulture center was established in Bandipur but failed due to needful development by government. News by Eliza Manandhar The Himalayan Times, Published: 03:02 P.M. Feb 09, 2010 https://thehimalayantimes.com/business/silk-sector-trudging-on-rough-road

10. SWOT Analysis of Garments and Textiles in Nepal Nepal : Market Survey report Strengths One of the last regions in the world to commercially use traditional manufacturing methods Quality and designs are unique selling points for Nepalese products in niche market Plentiful labour available Technology is increasing across all manufacturing sectors High quality products Female worker-friendly Good relationship with importing countries Skill development opportunities for the youth in short period of time (three to six months) Weakness Higher costs and inefficient production process Insufficient and irregular supply of electricity Lengthy customs procedures Lack of market diversification Lack of modern yarn spinning and dyeing plants and facilities hampering product diversification Lack of silk production in Nepal necessitates import of silk at higher prices from India No in country laboratory testing facilities Opportunities Growing international markets New and emerging markets with low tariffs for Nepal Growing preference for organic packaging Value addition potential for growth and diversification Potential to increase goat farming and invest in domestic yarn production to increase import substitution Opportunities for large employment generation Threats Competition due to price, quality, and volume from China and India High dependency on imported raw materials Shortage of skilled labour due to very large outmigration Counterfeit products on sale in Nepal harming international image

11. Value chain of silk in western Nepal Source: Sharma et al., 2021

12. Value addition of silk in Western inner terai of Nepal Degumming cost: NRs. 30 kg -1 Dyeing cost: NRs. 225 kg -1 36% profit margin occurrence Source: Sharma et al., 2021

13. Silk in western terai of Nepal Producing Bi- voltine species of species of Mulberry silkworm Yield is 30.05 kg ropani -1 twice a year Primary collectors buys cocoon @ NRs. 500 kg -1 i.e. 15% more than percent sales sold to the government and have B/C ratio of 1.3 i.e. 30% and more of profit margin Average gross margin is NRs. 8542.63 ropani -1 or NRs. 128.77 kg -1 Dang and Chitwan Valley at 750-1500 masl are suitable for Sericulture recommended by research (Sharma et al., 2021; JICA, 2011) Major exporter is SAN (Sericulture Association Nepal) Source: Sharma et al., 2021

14. SWOT analysis report of Silk in Western terai of Nepal Strengths Climatic suitability. Increasing demand in local, national as well as international markets. Governmental assistance and support. Availability of land favorable for mulberry cultivation. Formation of Farmer’s Group and co-operatives for better production Availability of family labor. Trainings, seminars related to quality processing accessibility. Handmade silk products. Better channels and linkages for cocoon collection. Weakness Shortage of input supply. Lack of technical knowledge on production and management. Land fragmentation. Variation in silkworm quality. Decreased level of productivity. Less coordination among the development agencies. Shortage of water supply in different areas. Inadequate out-reach and follow-up of extension programmes . Inferior quality of processing machines. Less availability of expertise in marketing. Opportunities Better scope for the increment in production and productivity. Availability of land for sericulture in mid hills and inner terai. More interest of farmers towards silk. Growing demand in markets. Various institutions (public and non-governmental) working in this sector. Quality improvement in silkworm egg through university and governmental research. Availability of markets for selling fresh ccocoons . Threats Risks of pests(ants) and diseases( muscardine ) infestation. Higher production cost. Uncertified silk being sold in market. Variation and inconsistency in volume and quality of production. Very less research in quality processing technology. Government monopoly in silkworm eggs production. Comparatively cheaper cocoons from other countries. Less price for other synthetic silk-like fabrics. Source: Sharma et al., 2021

15. BANANTEX Developed by swiss bag brand “QWSTION” and yarn producing partner in Taiwan BANANTEX produces bio-degradable textile product from Manila Hemp/ABACA Banana plant ( Musa textilis ). No use of pesticides, natural farming Grown at highlands of Phillipines Harvested 3 times a year Obtained Awards Green product award selection, 2019 Design Prize Switzerland winner 2019 German sustainability award design 2021 Cradle to cradle gold certification award

16. Chinese Fabrics China Liahren Co. Ltd. Hemp fabrics Bamboo fabrics Milk fabrics

17. Which Sector to work? Source: Sharma et al., 2021

18. References: Vainker , Shelagh (2004). Chinese Silk: A Cultural History. Rutgers University Press. pp. 20, 17. ISBN 978-0813534466. https://inserco.org/en/statistics https://www.maximizemarketresearch.com/market-report/global-silk-market/26259/ MoALD . (2022). Krishi tathaa pasupanchee diary 2079. Ministry of Agriculture and Livestock development.Kathmandu , Nepal. https://aitc.gov.np/downloadfile/agriculture%20diary%202079_1651480914.pdf https://www.customs.gov.np/page/statistics MoFA . (2018). Nepal: Market Study, Identifying Foreign Direct Investment Opportunities in Nepal. Ministry of Foreign Affairs. Commissioned by The Netherlands Enterprise Agency. https://www.rvo.nl/sites/default/files/2018/10/Nepal-Market-Study.pdf Sharma, S., Acharya, S., Regmi , S., Poudel, A. and Adhikari, G. (2021). Production activities and value chain analysis of sericulture in western inner terai region of Nepal. International Journal of Social Sciences and Management. 8(2): 362-371. https://www.nepjol.info/index.php/IJSSM/article/view/36614/28617 JICA. (2011). Project completion report: Promotion of quality cocoon production and processing project in Nepal (PQCPPP). Japan International Co-operation Agency. Collaboration with DOIED/DOA, Government of Nepal. https://openjicareport.jica.go.jp/pdf/1000015897.pdf