Gold shortage may lead to cancellation of export orders in September

Gems and jewellery manufacturers may face large-scale cancellation of orders from overseas buyers in September as the production has been hit by lack of gold stocks, Gems and Jewellery Export Promotion Council has said.
Last fiscal, India exported ` 2,12,638.89 crore-worth gems and jewellery, according to GJEPC.
“Since July last week, there has been no gold imports into the country. The lack of stocks is affecting manufacturing… which may result in cancellations of orders, heavily affecting the exports in September,” GJEPC Vice-Chairman Pankaj Parekh told PTI.
The importers would turn to countries such as Malaysia and Hong Kong, which face no such problem, he said. The total exports declined 11.28 per cent during April- July to ` 62,311.76 crore, from ` 70,231.97 crore in the same period last fiscal.
There have been no gold imports since July 22, when an RBI circular said that 20 per cent of an imported consignment should exclusively be made available for exports, Parekh said. As the Customs were unsure of how to implement it, they stopped all stocks from entering the country. On August 14, RBI issued a clarification, still the Customs did not release gold stocks from airports, he said.
“There is almost no stocks for manufacturing the September consignments, which was to be manufactured in August,” Parekh said. Central Board of Excise and Customs has called the GJEPC for a meeting in this regard on Monday, he said, adding: “we hope we will come out with some positive solution.”
The major markets for jewellery exports are the US, Europe, the Middle-East, Hong Kong and Japan. The shortage has affected the the domestic jewellery sector too. “The gold stock situation is very bad. It is very difficult to even buy 100 grams of gold,” All India Gems and Jewellery Federation chairman Haresh Soni said. “There are no stocks to fulfil current orders,” he added.

Source: Bullion Bulletin

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