The Afghan carpet industry says their export business has been affected by the loss of subsidized air routes, commonly known as air corridors, as the government has stopped paying the subsidy costs for the exports.
The business community said carpet exports have dropped by 90% over the last month following the closure of the air corridors.
They said exporting carpets at $14 per square meter to Europe and China is not viable, and that they cannot afford to send their products without the government subsidizing the air corridor transportation costs.
“We used to export carpets to China and Europe through the air corridors; unfortunately, the corridors are closed now,” said Mohammad Hadi Hussaini, a member of the Union of Carpet Production and Export Companies.
Previously, 80% of the export costs through the air corridors were being paid by the government and industries paid only $0.60 per square meter of carpet to China, and $0.50 to Europe.
The Afghan Chamber of Commerce and Industry said the government allocated AFN354 million (over $4.5M) for the air corridor sector as a subsidy, but the government is behind in payments, so the airlines are not providing the freight transport at the subsidized cost.
“The airline companies are not allowing, under any conditions, the transfer of cargo and shipments abroad under the subsidy framework. Their argument is that the government has not paid their previous invoices which are up to 1-3 million dollars,” said Shafiqullah Attayei, CEO of the Chamber of Commerce and Industries.
Previously, the Afghanistan Central Bank said that the financial issues with the airline companies had been solved; nevertheless, the air cargo companies say they have not received their owed payments from the government.
The Ministry of Industry Commerce and Industry said it plans to subsidize some of the carpet export’s costs. It added that after adjustments in the national budget over the next two months, the exports via air corridors will be resumed.
“The Ministry of Industry Commerce and Industry will soon reveal a "6% cooperative package" to help facilitate the exportation of Afghan hand-woven carpets to other countries,” said the spokesman of the Ministry of Industry Commerce, Fawad Ahmadi.
The Union of Carpet Production and Export Companies said that producing one square meter of carpet costs them $70 and they can sell it for $90 in China and €100 in Europe.