Jewellery stores in the green belts across the country like North Indian states, Bengaluru, parts of Pune and West Bebgal, and north eastern states have already announced reopening weeks ago. With jewellery stores in Mumbai raise their shutters, rollover of gold and jewellery in the country will increase and hence, business across the value chain would gather momentum gradually.
Owing to the nationwide lockdown, buying jewellery for weddings, Chaitra Navratri and Eid was muted. Some players tried selling jewellery online too, but the offtake was negligible.
“We can see redemptions held up due to the nationwide lockdown
making a comeback. Along with old gold exchange, consumers normally buy ornaments with additional grammage of new gold. So, we estimate demand for new gold despite a lean buying season,” said Rajiv Popley, Director, Popley & Sons, a Mumbai-based retailer.
Wedding demand is expected to be of low caratage -- smaller gramage but with heavy jewellery.
“There will be no downside in jewellery buying at this level. There will be recovery going forward even during the current lean season as supply from the key Mumbai market will start the ball rolling across all jewellery value chain,” said Surendra Mehta, National Secretary, India Bullion and Jewellers Association (IBJA).
Meanwhile, jewellers are facing margin calls on gold metal loan due to appreciation in gold prices during this lockdown
period. Standard gold prices have risen to trade at Rs 46,225 per 10g on Thursday from its level of Rs 42,078 per 10g immediately before the lockdown
began on March 25.
Ananth Padmanabhan, chairman of All India Gems and Jewellery Trade Federation, however, believes that jewellers will use the stock they had built for sale before lockdown.
“Jewellers would clear old stock and go slow on new manufacturing due to expectations of weak sales during the monsoon season. Also, skilled karigars have already migrated back to their native place which would impact manufacturing of jewellery. We are trying our best to bring them back to their original back for preparations of Dussehra and Diwali seasons,” said Padmanabhan.
Jewellers have paid Rs 4500 as one time help to skilled karigars and arranged with travelling to their native place. Jewellers are planning to offer higher salary and incentives to bring karigars back to jewellery making.