A sharp fall in gold prices is a good news for gems and jewellery exporters

A sharp fall in gold prices is a good news for gems and jewellery exporters who will be able to source yellow metal at lower rates and compete better in the global market, industry sources said.

After seeing the steepest ever fall of Rs 1,540 per ten gram in a single intra-day market, gold lost Rs 600 today on cues from the global market where investors are busy shuffling their investment portfolios.

Gold closed the day at Rs 26,740 per 10 grams in the Delhi market. The exporters feel that they would stand to gain if gold prices continue to decline, along with a fall in rupee against dollar. The Indian currency is near Rs 50-to-a-dollar mark, weakening by about nine per cent within this month. A weak local currency results in higher net realisation for foreign exchange earned by exporters.

Indian gems and jewellery industry imports about 80 per cent of its raw material, including gold and rough diamonds from countries like Africa and Russia.

“It (fall in gold prices) is a good sign because a company can import the yellow metal at a lower rate bringing down the cost of the end-product which is meant to be exported further,” Director General of the Federation of Indian Export Organisations (FIEO) Ajay Sahai said.

The situation would lead to an increased business for the exporters, he added. The UAE is the main destination for India’s gems and jewellery, accounting for 31 per cent of the total exports, followed by Hong Kong and the US.

However, Gems and Jewellery Export Promotion Council Vice Chairman Sanjay Kothari said so much volatility is not good. With consignments of $ 33.54 billion, gems and jewellery was India’s third-largest export item in 2010-11.

During April-August period this fiscal, gems and jewellery exports grew by an annual 16 per cent to $ 18.12 billion. – PTI

Tags: , , , , , , , , ,

Posted by VBN on Sep 27 2011. Filed under Gold. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

You must be logged in to post a comment Login

Stay informed everyday

Subscribe to free RSS and email updates from Vietnam Business News

Subscribe via Email Subscribe in a Reader Follow us on Twitter Connect on Facebook

RSS Singapore Business News

  • PLife Reit’s Q3 revenue hits S$22m
  • Roxy-Pacific’s net profit jumps 50%
  • Works to start soon on Tuas MRT station
  • Punggol condo site attracts 5 bids
  • SGX suspends membership of MF Global S’pore
  • SIA reports 49% fall in Q2 net profit

RSS India Business News

  • Retailers predict sales slowdown in coming quarters
  • Bulk drug exports excluded from bar coding
  • Diesel, LPG prices set to rise again
  • Higher sales in chronic segments boost revenue
  • New drug pricing policy to pinch top three firms
  • Sensex up over 180 points; Sterlite, Hindalco, Axis Bank gain

RSS Malaysia Business News

  • Ex-servicemen get fruitful return from ‘golden crop’
  • K-Link to strengthen foothold in Indonesia
  • Malaysian Marine rises on RM1.4b job
  • Yeo Hiap Seng climbs on Q3 profit jump
  • CSC Steel suffers Q3 pre-tax loss of RM1.98m
  • Nestle posts higher Q3 pre-tax profit

Sponsored

  • Looking for an overseas forex broker?
  • Trading Point now offering Forex Malaysia and FX Japan with Forex, CFD's and Futures.