Gold price rise not to hit Indian export target
Facebook Twitter google+ RSS Feed

Gold price rise not to hit Indian export target

Wednesday, 18 December 2002, 08:00 Hrs
Printer Print Email Email
NEW DELHI: India is well on its way to achieving its 15 percent export growth target in gems and jewellery despite the global gold price escalating, say industry representatives.

"Internationally, despite the volatility in prices this year, our exports have been good," Surendra Singh of the Gems and Jewellery Export Promotion Council (GJEPC) regional office in Delhi said.

"The $10 rise in gold prices may not affect overseas trade much as in the West it would only mean a difference of around $3 per 10 grams, but in the domestic market the impact may be different."

India's gems and jewellery exports last year were worth $7.2 billion and the target for this fiscal has been revised to $8.6 billion, given the overall 15 percent growth so far this fiscal.

"In the last two years, the decline in the export of gold was primarily due to a fall in gold prices in global markets, resulting in a corresponding decrease in the export value of gold jewellery," said a commerce ministry official.

The latest global upswing in the price of the precious metal on December 12 to a five-year high of $340 an ounce happened just when shoppers globally were geared to make Christmas purchases for exchanging gifts.

In the short term this is expected to make price sensitive buyers wary but in the long term make investors happy, say market experts.

Leading traders like Ramesh Narang of Hazoorilal Jewellers feel it is boom time for them and investors.

"We are not expecting any impact on exports. For those looking at gold purely as an investment this rise in price comes as a good news as it justifies the faith in gold as an attractive investment," said Narang.

"In the long run, the rise in gold prices at regular intervals is good for boosting the confidence of investors, though for those who buy gold after carefully studying the market movement, this would mean a demand drop," admitted Narang.

"The terminal (retail) buyer is price sensitive whether here or in the Middle East, Britain or the U.S., which is our biggest export market," said Rajendra Bhola of Bhola Sons Jewellers.

"The sharp increase of $10 per ounce last week may well be absorbed or be immaterial for rich buyers but for the small buyers in the Middle East and other markets in the West, it is making a difference."

A major exporter, Bhola, reported a drop in exports in December compared to the same month in 2000. Last year was an exception as it came soon after the September 11 acts of terrorism and global economic uncertainty.

"Normally our exports are exceptionally high till December 20 after which there is a lull till January 5 due to bank holidays and pressure on airlines. This year our exports in December have been around half of what we expected with the prices going up," said Bhola.

After starting the year at $270 an ounce (30 grams), gold price is up 24 percent at present to near $340/ounce in global markets.

Fear of a war in the Middle East, a weak stock market, terrorism fears, weakening of the dollar are among a host of reasons attributed by experts for the hardening of gold prices this time.

G.S. Pillai of the World Gold Council too shared the sentiment that for domestic consumers, the rise in gold price may prove to be a deterrent though the rise works out to just around 150 per 10 grams.

"Given that during festive and marriage season, as is the case now, the purchases are more demand driven, we don't expect much slowdown in retail sales. But for other buyers keen to make a big buy even this price increase may prove a dampener," said Pillai.
Source: IANS
Experts on SiliconIndia
Santhosh  K
Sr. Soft. Engg.
Oracle India
Nehal Vyas
Sr. Team Lead
Cyberoam Tech.
Rani Malli
Sr. Director
Philips
Sr. Executive
ISB
Vijay Balkrishna Konduskar
Business Consultant
Imans Web Tech
Dr L P  Sharma
Technical Director
NIC
Reena Khanna
Founder
Solitaireworld
Dellas  Asse
sys-network admin
Computer Station
Write your comment now
Submit Reset
SPOTLIGHT