India’s gold merchants are expecting a sustained pick-up in sales for the second round of festivals, as a reviving economy and stable prices may aid sentiment, triggering a reversal in declining trend in imports.
“People have started buying from July for the upcoming weddings, actually they all had money but unwilling to spend it due to recession, now they have started buying,” said Jaipur-based Jewel Ace Chief Executive Officer Justin Varkey, whose company sold Rs 25 million worth of jewellry last year.
India is currently hosting Asia’s second largest gems and jewellry exhibition in Mumbai, displaying gold ornaments from 700 domestic jewellers and 200 overseas makers.
The five-day fair is considered an indicator of order-book demand ahead of the August to November festival and wedding season, when gold buying tends to spike. Gold imports in 2009 fell to its lowest level in more than a decade as the worst monsoon in nearly four decades and fears of recession overseas dented sales.
“There could be a rise of over 10 per cent in imports this year as even monsoon are good, industrial activity is picking up along with employment,” said analyst Nayan Pansare.
Demand for gold in top consumer India hinges on a good monsoon, which boosts farm output and rural incomes. The crucial monsoon rains are likely to be above normal in the remaining two months of the June-September season.
“We have seen a growth in sales this year and are gung-ho for the season. We expect a rise of 50 per cent in sales,” said Mumbai-based retailer Cogent jewellry director.
Gold imports in India, the biggest consumer, rose 18.9 per cent to 155.6 tonnes in the first six months to June, and jewellers say there could be a reversal in trend this year given the positive feedback from consumers.
Prices have fallen more than 2 per cent from their all-time high of Rs 19,198 per 10 grams struck in early June, when investors overseas sought a safe-haven instrument amid the economic turmoil in the European Union. Prices have been in the range of Rs
17,500-18,750 for most part of the year. “It’s going to a cautious year after the recession last year,” said Pansare.
Industry participants say jewellry exports to the US would see a rise compared to other traditional markets like Japan and the European Union. “Order production has already begun for the US for Thanksgiving day and Chirstmas. We see a rise of 4 to 5 per cent in sales this year,” said Pansare, of Yash jewellry, which exported $100 million worth of jewellry last year.
India, which exported $28.41 billion worth of gems and jewellry last year to March 2010, shipped more than 60 per cent to the US, its largest market.
“In all, we feel that there could be a rise over 10 per cent in gems and jewellry exports and especially over 10 per cent from the US as the economy is coming out of recession,” said Gems and jewellry Export Promotion Council Chairman Vasant Mehta.
A Must-Have Report for Buying Gold Stocks
Learn How to Buy Gold Below Spot Prices
No comments:
Post a Comment