Slowdown in Gujarat gold jewellery business

April 3rd, 2008 - 1:42 pm ICT by admin  

By Madhu Barbhaya and P.S. Anantharaman
Rajkot (Gujarat), April 3 (IANS) The sparkle has gone out of Gujarat’s gold jewellery business, with an estimated fall of more than 50 percent in ornament sales across the state due to skyrocketing prices of the yellow metal. Snatbhai Zaveri, a leading jeweller of Bhavnagar city, said: “There is a major fall in the sales of ready ornaments due to higher prices of gold. One cannot afford to buy gold at the prevailing price for savings purposes. Only those who are compelled to buy gold to meet social obligations are buying it now.”

According to trade sources, the gold jewellery business in the state is worth about 160 tonnes a year or 13,000 kg a month. Currently, the sales are hovering around 6,500 kg a month.

The downturn in sales began during Diwali 2007, after which there has been a relentless increase in the price of gold, touching Rs.11,500 per 10 grams now.

On the other hand, the state is witnessing a rush of people who want to sell their gold ornaments and make a profit. Old gold ornaments, known as ’scrap’ in the jewellery market, are fetching good prices for owners.

Balwantbhai Badani, president of the Rajkot Gold Dealers Association, told IANS: “Customers are selling their ornaments because they had purchased them at lower prices in the past. Those who had bought ornaments during 2007 had paid about Rs.6,000 per 10 gram at that time. So what is being witnessed in the market is profit booking.”

There are more than 10,000 showrooms in the state - with 3,000 in Ahmedabad alone - which sell gold and silver ornaments.

Ashokbhai of Pachchigar Jewellers, Surat, estimated that the fall in the gold jewellery business was more than 50 percent. “Only affluent sections of society are in the market because only they can afford the higher prices,” he said.

Shashikant Patadia of Radhika Jewellers, Vadodara, also reported a considerable decrease in the sale of gold ornaments.

Nanalal B. Soni, president of the All India Shrimali Soni Samaj, echoed a similar view. He also said thousands of artisans engaged in manufacturing of gold ornaments, including those from West Bengal, have been rendered jobless.

A large number of artisans in Gujarat make a living from gold and silver jewellery making.

Soni added: “There is a great fall in footfalls in jewellery showrooms. Those from the middle class and upper middle class who are compelled to buy gold jewellery for marriage purpose prefer to buy light weight ornaments.”

The all-India consumption of gold as jewellery is over 800 tonnes annually.

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