Jewellery exports expected to revive

Christmas related orders indicates falling trend has been arrested

Gem and Jewellery exporters are betting on Christmas demand to help arrest declining trend in jewellery exports this year.

In the first seven months, exports have risen only 3.5%, which is slower than growth in exports in April-September which was 6.5%.

Fall occurred due to uncertainties in US related to the upcoming US presidential elections. US is largest market for Indian gold jewellery and diamond.

“We expect that the exports will start improving again in the US and other markets as data flow coming up there show consumer confidence has been improving. Even QE3 which was though announced in mid September has started indicating that consumers are up for spending,” said Vipul Shah, who recently took over as chairman of the Gem and jewellery Export Promotion Council (GJEPC).

He also said that Christmas related orders that have come and are being delivered so far suggest that falling trend has been arrested.

Christmas demand is crucial for jewellery exporters.

Falling rupee is also coming to their rescue.

Even Capitaline analysis is saying "the exports of Gem & jewellery sector which has been declining from last 6-8 months is now expected to see some revival in export demand for diamonds ahead of the Christmas season in US. However, the demand would not be very strong due to slow economic recovery in the country coupled with the debt crisis in Eurozone countries.”

Capitaline also says, “Within the export segment, players who had not hedged their forward forex revenues, and players with increasing share of high margin jewellery export are relatively better placed. Players focused on domestic demand will be boosted by the rise in demand for the ensuing marriage season.”

In cut and polished diamond segment some improvement has already been noticed.

The declining trend in cut and polished diamonds exports from the country continued in October, but the year-on-year fall was lower than the previous month in dollar terms as well in rupee terms as per the data released by Gem and Jewellery Export council.

The fall in cut and polished diamonds exports moderated to 28% to $1339.26 million (contributing 49% to total exports) from 39% at $1507.34 million in September 2012. However, sequentially, the segment observed fall of 11% in exports during October followed by growth in last consecutive months at 42% in August and 7% in September 12.

A significant proportion of the polished diamonds are exported to markets like the UAE, USA, Hong Kong and the European countries. While, gold Jewellery is exported to UAE, USA, Singapore and Hong Kong though in India it is primarily manufactured for domestic consumption.

Besides, silver jewellery is exported to USA, China, UAE, Hong Kong and UK. India imports gold and rough diamonds along with other precious metals.

Gold is bought from Switzerland, Australia, South Africa and UAE.

Rough diamonds are purchased from Hong Kong, Belgium, Israel, UAE, UK and USA. Precious stones are procured from Thailand, Hong Kong, Zambia, Srilanka and Germany.

Pearls are obtained from Japan, China and Hong Kong. Silver is sourced from UK, China, Russia, Switzerland and Hong Kong.