Jewellery sales slump for higher gold price

The demand for jewellery has plummeted in Bangladesh due to the record high prices of gold, ongoing political uncertainty and rising living costs, according to market players.

Sales have come down to one-fourth of their previous levels in November, when demand typically rises amid the wedding season in winter apart from major festivals like Eid and Durga Puja, they said.

An official of the Venus Jewellers outlet at Bashundhara City in Dhaka said many people are postponing their weddings to avoid any untoward situation that may arise amid the current political unrest.

 "So, we are not getting many orders this time around," he added.

Besides, jewellers had raised the price of 22-carat gold to Tk 104,626 per bhori on November 5.

The new rate, up by 1.7 percent from the previous high, came into effect yesterday.

The rate was increased owing to a spike in pure gold prices in the local market, according to the Bangladesh Jewellers Association (Bajus).

The price of pure gold goes up whenever it is not available as per demand, a Bajus official said.

Many people bring gold into the country under the baggage rule. Then, the precious metal is bought and sold based on the international price.

So, local gold prices increase in line with changes in the global market, the official added.

Commerce ministry documents show that the demand for gold in Bangladesh is about 20 to 40 tonnes per year, almost 80 percent of which is met through smuggling while the rest comes from recycling.

Market players say that gold prices have been rising for more than a year due to hikes in the international market and volatility in domestic supply.

Md Moazzem Hossain Rana, owner of Reshma Jewellers in Dhaka's Mirpur, said sales have decreased by 80 percent compared to normal times.

Rana also said he is not getting the same volume of orders he did in previous seasons as rising gold prices and higher living costs have had a major impact on the business.

Gold prices had crossed the Tk 1 lakh mark for the first time in July this year.

Bimal Halder, a jewellery trader in Goshairhat upazila of Shariatpur, said the number of orders he has received so far in November is far lower compared to the same month in previous years.

He added that people are buying fewer gold ornaments due to the country's overall situation, increase in gold prices and higher living costs.

ABM Musa, owner of Shahadat Jewellers on Sadar Road in Barishal city, said 80 percent of their annual gold ornament sales usually come during winter.

However, Musa said he got 70 percent fewer orders this November compared to the same month last year.

As such, he is now very worried about how to manage operational costs in the coming days.

"The rate at which gold prices are increasing is quite worrying because sales are decreasing day by day," said Dewan Aminul Islam, vice-president of Bajus.

"Events like weddings will be less this winter due to strikes and blockades ahead of the national election as it is normal for people to avoid taking risks amid the ongoing uncertainty," he added.

Islam also said that earlier, many people would gift gold ornaments on different occasions apart from marriage.

"But now, due to the higher cost of living, they are avoiding giving such gifts," he added.