|
|
|
Quality |
Service |
Uniqueness |
Value |
 |
 |
 |
 |
Persian Rug prices
UPDATED 1/7/08
Quick Update: 1/7/08
One word sums it all up: UGLY!!!
Got back from my trip a couple of days and as always, I'm completely jet-lagged.
Last year, I thought I had seen it all and once again I have been completely
wrong about the prices of the high quality Persian rugs, especially the Tabriz
and Qom pieces. In 2007, the Tabriz and Qom rugs have gone up in price about
30%, yes, that is 30%. Nain and Isfahan rugs have gone up about 10%. The main
problem continues to be the high inflation in Iran, officially at 15% but in
reality closer to 25%, and the continued weakness of our US dollar.
The prices in Tabriz and Qom are
going up higher simply because more and more folks are giving up the
rug business altogether. In places like Khoj, which is a small
village where the Mahi (fish) design Tabriz rugs are made, the
production is now about half of what it was just 5 years ago and as
a result, the prices are just shooting up. The same is happening in
Qom as well. Prices in Nain and Isfahan are going up, but due
to their traditional designs, there are still plenty of rugs to
choose from, and therefor the prices will not climb as quickly.
My goal was to purchase about
30-40 rugs and I only ended up with 17 instead. I will be going
overseas again in a few months and will update you again as soon as
I return. Take a look at the 3 Tabriz rugs further down and you can
see how the prices have changed.
Below is an much more detailed article about the overall situation and I will
update this page again after my next trip.
Take care,
Mike
Quick Update: 4/17/07
Got back from my trip overseas last week and
just recovered from a bad case of a cold and jet-lag. The price of Persian rugs
is still going up and it appears that the inflation rate in Iran is stabilizing
at around 15%, but the weak dollar is having a huge impact as it has for last 3
years. As of mid April, the US dollar is approaching a new record low against
the Euro and it is already at a 15 year low against the English Pound and many
other currency. Do not expect any relief any time soon.
Below is an much more detailed article about the overall situation and I will
update this page again after my next trip.
Take care,
Mike
Dear visitor,
I was planning to update this page in the summer of '07, but
there have been a dramatic shift in Persian rug prices and I felt compelled to
edit this sooner rather than later.
Since the summer of 2006, there has been a tremendous rise in the cost of
Persian rugs and it is a direct result of the domestic and political situation
in Iran at this time. The Iranian government began in mid 2005 to increase many
wages, pensions, and to subsidize programs that were meant to benefit the
low-income families. In addition, the government also began to boldly rub it's
nose at the rest of the world and we all have been watching plenty of it on the
news. Many believe that this is due to the high cost of oil and the huge profits
that come with it, since the Iranian government can now afford to spend on
domestic and foreign programs that it simply could not before.
As a result of the political and financial upheaval, there have been some
unpleasant repercussions that I do not believe that the Iranian government or
people quiet expected. For one, the inflation rate has simply gone through the
roof. Whereas officially it is around 10% annually, which is absolutely huge, it
is in reality closer to 20-30%. As a result, the prices of everything from basic
goods like food and clothing to high end products are just going through the
roof. My family always uses three examples to tell me how things are and those
are bread, kebabs, and real estate. The price of bread has more than doubled in
the last year and going out to dinner for some delicious kebabs is becoming
somewhat interesting. As my mother recently pointed out, all of the menus have
their prices covered up and there is a penciled new price next to the old one,
which seems to change every month. Another good way to measure the current
situation is to look at real estate, which is just going through the roof
without any clear reason. Unemployment is still very high and there seems to be
little demand, but the prices of real estate is going up simply to keep pace
with the inflation. Remember, even at 20% inflation, a house at $200,000.00
would have to be sold for about $250,000.00 a year later just to keep up with
the value of the currency.
During unstable economic times, the Iranian people tend to take shelter in three
different commodities and the way of thinking is very different than ours.
Whereas we would save money and cut our spending, many Iranians will actually
increase their spending since the prices will climb faster. The three popular
investments in Iran are gold, foreign currency (Euro & US dollar), and rugs,
since they are a safe bet. As the country's inflation and overall situation gets
worse, the currency will fall which will raise the prices of these three
commodities. Another example of how things are is my father's savings account
with the main Iranian bank, which is now getting a whopping 17% interest
(interest in Iran is non-taxable).
The bottom line is that the prices of rugs have gone up about 15% between the
summer of '06 and the beginning of '07 and I have no clue as to how much higher
they can go. There comes a point, where nobody can afford to buy them and
hopefully then, the prices will stabilize and actually come down. Then again, I
have been waiting for this for over 3 years now and lost most of my hair and
patience in the process. I will update this page again in April and hopefully
will have some better news for you.
In case you are interested in reading some more, there was an
news article that also shares some more light on the situation in Iran. Most of
the news we get is always geared to support one group or another, but this
article is actually very good since I was easily able to verify the information
with my own family. Just click on the link below and it should take you to an
article.
http://www.msnbc.msn.com/id/16676448/
To give you an example of how the prices have changed, I want
to show you three Tabriz rugs that are very virtually identical in quality, size,
and have a similar design. All three would be prices the same if they were
made and sold at the same time, so they are an accurate example for how the
prices and values of Persian rugs have changed.
Each of these Tabriz rugs
measures roughly 8x11 and is a 50 raj piece.
There is not one single factor for the price increases in
Persian rugs, but rather a combination of many. The weakness of the US dollar
compared to the Euro and other currency including the Iranian rial means that we
need to pay more for the goods that are imported into the US. I was hoping that
after the nosedive of 2004, the dollar would recover and it was heading in fact
higher in 2005, only to have fallen off again in late 2006 and who knows how bad
it will get. My clients from Canada and Europe seem to be very happy since they
can buy more and spend less with their currency, but it's been brutal for us.
Another problem for our rug prices is the inflation in Iran, which has actually
increased in the last couple of years. Thanks to high oil prices and huge
profits, the Iranian government has decided to give billions to the people by
tripling their paychecks, social assistance, and other programs that are geared
towards helping the poor. There are of course many people who say that there are
political reasons for this domestic policy, but this is not about politics and I
like to keep my views to myself. But what this huge government spending has
done, is to put a lot of money in the hands of the people, which is better known
as inflation. Since the Iranian treasuries are printing more bills than ever, it
has caused just about every product to go up in price and Persian rugs are of
course very important to the folks in Iran, so the net result means even higher
prices. My mother, who lives in Tabriz, likes to point to the fact that every
home now has stainless steel appliances and large big screen TV's courtesy of
cheap imports from China. Whereas before, only the Iranian upper middle and high
class could afford luxury items, now even the lower middle class can afford to
buy many goods that were unattainable just a few years ago. As a result, every
luxury item and especially real estate has shot up in value and banks offer over
10% interest on savings accounts, which tells you how bad the inflation must be.
|
I hope that you have enjoyed this article about
the prices of Persian rugs and
as always, I enjoy hearing my visitor's thoughts and experiences, so drop me
a line or two if you like.
Take care,
Mike Panah
Owner, MP Persian Rug Imports |
|