Coll 28/41 ‘Persia. Trade Reports. Kerman 1924–’ [‎106r] (211/313)

3
advantage, viz., the absence of Indian Customs is not
a factor of much importance as Kerman carpets and
other exports have little or no sale in India.
It must also be remembered that the bulk of the
wealth and population is concentrated on the West
and South West sides of the Province where it is
more conveniently placed to Bandar Abbas than to
l^gdab.
(F) Growth of Foreign competition and danger to
British interests resulting therefrom.
fl The only dangerous competitor is Russia. Ger-
• many is just holding her own with about 7 per cent.
I of the import trade. Russia has increased her share
from 1 per cent, in 1926 to 35 per cent. British
trade has dropped from 50 per cent, to 40 per cent,
in the last four years.
Cotton goods and yarn 40 per cent., Sugar 20 per
cent., Oil Products 10 per cent., represents 70 per
cent, of the imports. As regards sugar British capi
tal is only involved in distribution. In the other
two items Russian competition is being increasingly
felt and has captured 40 per cent, of the piece-goods
trade at the expense of the United Kingdom and
India and 25 per cent, of the sugar trade at the ex
pense of Java and Belgium.
(Cr) The Russians—Their Trading methods — Popu
larity—Success or failure.
The Russian method is to establish a reputation
for price cutting. Before a consignment of their
goods is expected extravagant rumours are spread
regarding the quantity and the price reduction.
Other merchants are thus frightened into unloading
their stock at reduced prices with the result that
the Russian goods appear in a depleted market and
can be sold at an enhanced figure.
The system of barter so unpopular in the North
is not in force here as the Russians pay cash for such
cotton, hennah, pistachios, etc., as they export.
However, their methods above described are un
popular with the bigger merchants as upsetting
markets and dislocating trade.
They dispose of their goods entirely to a Persian
Sales Agent, who sells to small retailers on a cash
basis but for bigger purchasers gives either a cash
discount up to 9 per cent., or credit for periods of
one to three months.
(Fj) Credits offered by Foreign firms as opposed to
those granted by British firms.
British firms for the most part require cash against
documents whereas German firms demand only 20
per cent, to 30 per cent, with order and the balance
against delivery of goods at the port of entry.
The Russian terms have already been referred to
in the preceding paragrah.
(7) Opening for British trade.
The importers of British goods are mainly the
five Hindu Firms, who handle 40 per cent, of the
import trade. They are, however, poor agents for
pushing British trade, being old fashioned and set in
their methods. They are but representatives of
firms in India and must take such goods as their
principals see fit to send them. A further defect of
the Hindu firms is that they are not in the least
interested in exports although it is clear that with
out development of exports the import trade cannot
be expected to expand. They are of course not
interested in purchasing British goods as such and it
is impossible to put them in direct touch with manu
facturers at home. They are rapidly losing ground
to Russia. A few years ago, they handled 75 per
cent, of the import trade but their share is now re
duced to 40 per cent. Two of the same firms had
to close down this year leaving only five. The break
in the exchange has hit them badly and it is probable
that some of the remaining firms will also have to
shut up shop. The only reason that they are enabled
to hold on at all is the extended credit they give
which no other traders are prepared to grant.
Russia is in the favoured position of having a com
petent European representative who can study the
market and embark on considered plan of imports.
It would seem that if British trade is to hold its own
against Foreign competition it must be placed on a
level with Russia by having a single importing firm
with an Englishman as Manager, who could study
the export as well as the import side of the market.
It will probaly be objected that British firms
established in Persia are not so enamoured with the
progress of branches already opened that they should
contemplate opening up new ones. This may be so
but it does not alter the fact that the present repre
sentatives of British trade must continue to lose
ground to Russia and that the only solution to save
the rot is for a competent British firm to open a
branch here. There is no record that the proposi
tion has ever been seriously considered by any
British firm. “ Prima facie ** there would seem some
favourable factors. The carpet trade is chiefly in
the hands of a number of European firms, who im
port annually dyes to the value of £ 12,000 and cotton
Yarn from £13,000 to £15,000. There are a number
of commodities such as copper, iron, tin, glass panes,
etc., which are at present imported in a spasmodic
haphazard manner with the result that stocks be
come exhausted and price soars up. Many articles
are imported from Europe through India which
involves unnecessary handling charges. Copper
quoted in the European market at £67-10-0 a ton is
sold wholesale at Kerman at £125 whereas the
freight charges and customs should not be more than
£25 a ton. There are in addition side lines which
offer considerable promise. For example there
should be an opening for irrigation pumps*. No
Persian will be ready to invest in a pump till he has
had an ocular demonstration of its capabilities.
There should also be a market for a simple form of
plough such for example as the Shanti designed
* See demand for foreign machinery.