US is losing its sheen as the biggest gems and jewellery importer with the recession hitting the American economy badly and China taking giant strides in the field.
According to traders and exporters, the recessionary trends in the world’s largest economy has stagnated the purchasing power of US consumers.
Following this, Indian exporters have lowered the purity of gold content in gold and diamond-studded jewellery in order to maintain the pricing.
The rampaging economy of China has improved the financial well-being of consumers, resulting into higher gem and jewellery consumption.
India’s exports to the US slumped to 26 per cent during 2007-08 from 35 per cent in the previous year while the shipment to Hong Kong jumped to 26 per cent from 15 per cent last year.
Gems & Jewellery Exports Promotion Council (GJEPC) attributed the slump in the exports to the US to a number of factors, including high gold price, depreciating US dollar, economic recession and huge appreciation in rough diamond prices.
The sudden fall in exports to the US can also partly be attributed to the withdrawal of generalised system of preferences (GSP).
The GSP, which provided the benefits of duty-free jewellery imports to underprivileged countries, including Bangladesh, was withdrawn on July 1, 2007.
Source: http://www.commodityonline.com/
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