The gold market of the country has been hit hard due to the coronavirus and repeated hike of price in the local market. Customers are few and far between in jewelry shops as price hiked on several occasions and social ceremonies came to a halt in the country since March due to coronavirus.
As a result, many goldsmiths have become jobless and jewelry shops were forced to lay off or cut wages of workers.
According to jewelers, sale of the gold has declined around 80 per cent although markets started to open after Eid-ul-Fitr.
25 per cent jewelry shops might close if this situation continues for 2 or 3 more months, feared the jewelers.
Bangladesh's annual demand for gold is between 20,000 and 40,000 kgs. About 10 per cent of the demand is met by melting down gold from old ornaments.
Rest of 90 per cent were imported through baggage rules as there was no legal way of import. Gold bar import by baggage rules comes down to zero as air connectivity got halted due to coronavirus. Also, prices soared in the global markets.
The price shot up to a record high of Tk 72,783 per bhari (11.664 grams) on Friday. The price rose Tk 8,500 per bhari within a month which creates a new crisis in the sector.
A price gap of Tk 4000-5000 per bhari always exists in the local market compared to the global market. Jewelry owner association leaders repeatedly gave assurance that the gap would reduce by Tk 3,000 if gold bars can be exported legally. The government last year approved the country’s first ever gold policy and gave gold dealership licenses to 19 companies. They started exporting gold legally last month. Yet there is no indication of decline in gold price.
Bangladesh Jewelers Association president Enamul Haque told Prothom Alo that the sector has been hit the hardest due to coronavirus situation rather than price hike.
He said a section of customers will always buy the precious metal no matter how high the price rises.
Enamul said many businessmen in the sector are being forced to lay off or cut jobs of workers.
Many businessmen are selling off jewelries from shops to manage their families, Enamul added.
Except 15-20 brand shops, rest of around 10,000 jewelers of the country are small or middle scale enterprises. There are around 50,000 goldsmiths in the country.
Around 20,000 goldsmiths work in hundreds of gold shops in old Dhaka’s Tanti Bazar. 99 per cent of them do not have any fixed salary. For making per bhari or 16 anas of jewelry, they get 2 anas. Most of the goldsmiths of Tanti Bazar have left Dhaka for their village as they do not have any work here.
Dinesh Pal, a businessman of Tanti Bazar and general secretary of an association of goldsmiths, said the business has already been a bit sluggish in recent years due to high prices.
He said many goldsmiths have changed their profession for that.
The goldsmiths of Tanti Bazar are facing immense hardship due to the coronavirus pandemic, he said adding that many goldsmiths have become street hawkers as they do not have any job.
But the businessmen in the Old Dhaka’s gold hub said the business of old jewelry is quite booming right now.
Dewan Aminul Islam, a jewelry businessman in New Market, said many shops cannot even sell any jewelry products in two-three days.
He said as people are holding wedding ceremonies in limited scale, most of them opt to buy only a ring or necklace.
The jewelry shop owners are adopting different strategies to survive in the current situation.
A renowned jewelry brand has decided to close 10 of their 25 outlets.
To cope with the situation, some businessmen are investing in buying old golds while some are offering installment facilities to the customers.
Bangladesh Jewelers Association general secretary Dilip Kumar Agarwala expressed dissatisfaction claiming that jewelers are not getting any loan facilities although the government has announced a stimulus package worth Tk 200 billion for small and medium entrepreneurs.
He demanded a 50 per cent waiver in shop rent and ration card facilities for goldsmiths.