August gold jewellery exports up vs July, seen rising ahead

MUMBAI Tue Sep 24, 2013 5:28pm IST

A worker examines gold earrings inside a gold jewellery factory in New Delhi August 13, 2013. REUTERS/Anindito Mukherjee/Files

A worker examines gold earrings inside a gold jewellery factory in New Delhi August 13, 2013.

Credit: Reuters/Anindito Mukherjee/Files

Related Topics

MUMBAI (Reuters) - Gold jewellery exports climbed in August from the previous month on improving U.S. demand even though exporters faced tight supplies of the metal on Reserve Bank of India (RBI) steps to tackle the country's rising trade deficit.

Exports could climb in the coming months as the Reserve Bank of India has tied metal imports by the world's biggest bullion buyer to its overseas shipments and the government recently clarified how the rule will work, potentially easing the tight supply situation for exporters.

India exported $561 million worth of gold jewellery in August compared with July's $441.4 million, the Gems and Jewellery Export Promotion Council (GJEPC) said in a statement on Tuesday. In tonnage terms, this would mean 12-14 tonnes depending on quality.

"Exporters were using their old stocks... August to November have generally been stronger months, and we have seen more sales to the U.S.," said Colin Shah, managing director of Kama Schachter, a gold jewellery exporter based in Mumbai.

India's efforts to stem buying of gold, the second-biggest item in its import bill, and protect its currency include a rule that 20 percent of all imports must be turned around and sold for export as jewellery.

But confusion over how the rule would work had virtually stopped imports since the end of July. They are expected to resume soon after a high-level meeting of government officials last week to clarify the rules.

"Right now, their issue is getting the raw material even if they have export orders. From October onwards, exports will recover after exporters start getting delivery of the yellow metal from the banks," said Shah.

Most banks would re-start placing orders with their suppliers after their stock, which is estimated to be at about one tonne, is cleared by the customs department at the airports just ahead of the peak Christmas season. A majority of India's gold imports are made through banks.

India shipped out $2.68 billion worth of gold jewellery in value terms from April to August, down 59.4 percent on year. Total gems and jewellery exports fell 13.4 percent to $13.84 billion during the same period.

Exports usually total only about 60-70 tonnes per year and compete for markets from the Middle East to the United States against jewellery from Thailand and Turkey.

India had imported a record 162 tonnes of the metal in May, about three times the normal monthly average. Imports totalled more than 380 tonnes in April-July.

India's total gold imports could now be below 750 tonnes in the year to March 2014, Arvind Mayaram, economic affairs secretary at the finance ministry said last week, about 60 tonnes per month under the new rule.

Silver jewellery exports rose 68 percent to $120.11 million in August on year, and jumped 143 percent in April to August to $634.16 million.

"Exports of silver jewellery will continue to rise as a majority of the jewellers who are in fashion segment have turned to silver," said Ariez Tata, managing director of Mumbai-based Yash Jewellery, which ships 75 percent of its output to the United States. (Editing by Muralikumar Anantharaman)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Shares Hit Record

Sensex, Nifty rise to second consecutive record high

Sensex surges 500 points on BOJ easing, L&T gains

The BSE Sensex and Nifty surged to record highs for a second consecutive session on Friday after Bank of Japan's surprise expansion of its massive stimulus programme raised hopes for additional foreign inflows, boosting blue-chips such as Larsen & Toubro.  Full Article 

REUTERS SHOWCASE

Wilful Negligence?

Wilful Negligence?

SEBI piles pressure on Sahara to sell overseas hotels  Full Article 

Indian Economy

Indian Economy

India's fiscal deficit in H1 almost 83 pct of full-year target.  Full Article 

M&M Earnings

M&M Earnings

M&M Q2 net profit down 4 percent, hit by poor monsoon.  Full Article 

Ban on E-Cigs?

Ban on E-Cigs?

Govt considers ban on e-cigarettes, sale of single smokes.  Full Article 

Commodities

Commodities

Silver futures in India hit four-year low on global cues.  Full Article 

BOJ Policy

BOJ Policy

BOJ shocks markets with surprise easing as inflation slows.  Full Article 

Shadow Banking

Shadow Banking

China's shadow banking sector growing rapidly, third largest in world - FSB.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage