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this year, sending a chill pang to local jewellers amid declining
local demand in the past few years due mainly to its price spiral.
The latest price hike came as the precious metal crossed a $1 ,000
mark in London bullion market recently. However the price is now
hovering around $990 per ounce in the international market. Now the
price of 22- carat gold stands at Tk 29 , 335 a bhori (11.66 grams)
in the local market, a rise from Tk 25 ,194 in January. At the same
time, 21- carat gold is selling at Tk 27 ,994 a bhori, rising from
Tk 23 ,000 , and 18- carat at Tk 24 ,786 from Tk 21 ,286 in January.
Gold jewellery sales dropped by more than 50 percent in the past
three years. The local consumption has declined to 10-12 tonnes a
year now from 45-50 tonnes five years back, and so the annual
turnover of the jewellers has also marked a fall. Presently, the
annual market size of gold jewellery is around Tk 3 ,000 crore, said
the industry people. Small gold jewellery makers and traders now
increasingly opt for producing silver jewellery, as demand for
alternatives, including silver and gold-plated jewellery, is growing
fast, said industry people. They said price hike in the international
market has impacted the local market. Industry insiders said as the
dollar has lost its previous strong foothold, the demand for gold,
now considered as a safe haven, is gradually increasing, and so is
its price. Anwar Hossain, president of Bangladesh Jewellery
Manufacturers and Exporters Association, said local makers are forced
to increase the prices of gold jewellery due to the growing price in
the international markets. "When gold price marks a rise in the global
market, all the member countries of World Gold Council have to
adjust the price, as we all have to buy gold from international
markets," Hossain said. "Apart from used gold, the main source of the
metal for locally made jewellery is the migrant workers, who are
allowed to bring 200 grams of gold each time they come to
Bangladesh." Migrant workers, mainly from the Middle East, and
travellers buy gold at international prices and sell for more in the
local market, which is another reason for the price hike, Hossain
said. "Also, we have to raise the price to safeguard the local
industry. If we do not increase the price of local gold, it may be
smuggled to neighboring countries, where the price is higher, "
explained the association chief. "Foreign traders will purchase gold
at lower prices from us and sell at higher rates in their own
countries," he said. However, Hossain said the price of gold
jewellery in Bangladesh is lower so far than that in the neighboring
countries. He said around 20 percent small manufacturers and traders
of the association have quit business and taken to making silver
jewellery. Simultaneously, consumers' purchasing capacity and the
number of buyers have been constantly declining because of increasing
prices. "The price of gold jewellery has risen beyond the reach of
the common people. Except for weddings, people, especially the middle
class, do not buy gold jewellery," said Setara Gujnavi, who recently
came to purchase jewellery at Baitul Mukarram market for her
daughter's wedding. "We are cautious about choosing jewellery
because we have to strike a balance between the amount of gold and
design," she said. "Other than weddings, we cannot even think of
buying gold jewellery as a gift item."
