Pandemic, soaring prices hit gold jewellery sales

Published January 27, 2021
KARACHI: A picture combo  shows melting process of gold and final processing or finishing of ornaments at a workshop in the Saddar area on Tuesday.—Photo by Fahim Siddiqi/ White Star
KARACHI: A picture combo shows melting process of gold and final processing or finishing of ornaments at a workshop in the Saddar area on Tuesday.—Photo by Fahim Siddiqi/ White Star

KARACHI: Conflicting claims have emerged over the revival of gold jewellery sales since the start of the wedding season from Sept 15, 2020, with many jewellers painting a gloomy picture while others not so despondent.

Talking to Dawn, jewellers commented that affluent families continued to buy gold jewellery sets despite the cash crunch felt by most amid the Covid-19 pandemic.

Upper-middle and middle income groups found it difficult to even think about giving gold sets to their daughters due to ‘unaffordable prices’, forcing them to buy artificial jewellery, they added.

“A three-tola gold set comprising a necklace, earrings and ring costs Rs350,000 minimum while two-tola sets are priced at Rs200,000-225,000 in view of the current gold rate,” said chairman of the All Pakistan Jewellers Manufacturers Association (APJMA) Mohammad Arshad. Currently per tola 24-karat gold price is set at Rs113,200.

“Sales are depressed by 70 per cent in January amid the ongoing wedding season,” Mr Arshad added.

“Many people who were unable to buy gold ornaments due to rising cost of living are switching to artificial jewellery sets. Besides, security issues also haunt buyers who do not want to take the risk of using gold sets on the wedding day,” said the APJMA chairman.

The 10-gram and one-tola gold prices jumped by Rs21,947 and Rs25,600, respectively, in 2020. On Dec 31, 2020, the 10-gram and one tola gold prices were Rs114,000 and Rs97,737 as compared to Rs75,790 and Rs88,400 on Dec 31, 2019 based on the massive jump in international price of the precious metal by $372 per ounce to $1,894 from $1,522.

Sindh Sarafa Jewellers Association (SSJA) chairman Haji Haroon Rasheed Chand said small to medium-sized jewellers are working on only 40pc business as gold prices have gone up drastically.

“People are already perturbed by skyrocketing food prices and utility bills. Due to increasing gold prices, many clients come with old jewellery sets to get new ones made by compromising on the weight,” Mr Chand explained.

Disagreeing with other stakeholders and referring to the lockdowns and subsequent suspension of large gathering and wedding functions prior to Sept 15, 2020, Pakistan Gem and Jewellery Exporters and Traders Association Export Committee chairman Habib ur Rahman said: “Something is better than nothing.”

“Gold jewellery sales have fallen by 30-40pc but the wedding season has revived hopes of jewellers from September onwards,” he said.

Pakistan’s gold imports in July-Dec 2020 fell by 68pc in quantity to 72kgs and by 52pc in value to $4.385 million, data by the Pakistan Bureau of Statistics (PBS) showed.

“Official gold imports remained suspended from May to August 2020 due to rising prices in world markets. Jewellery exports also lost pace in the above period,” said Mr Rahman. He went on to add that jewellery exporters usually import gold for making sets and ornaments under a scheme.

“Jewellery exports remained subdued in April to May due to the Covid-19 pandemic as many international markets were either shut or partially opened. Also there was a drastic reduction in air traffic. However, things started recovering from July 2020. Jewellery exports in July-Dec 2020 rose by 123pc to $5.764m as compared to the same period last fiscal,” he explained.

Mr Rahman noted that the UK is facing a lockdown which had hit gold jewellery exports badly in January. Gold jewellery is also being exported to Canada, US and Dubai.

Published in Dawn, January 27th, 2021

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