Medallion, coin exports jump over 1250 per cent

Chennai: After tapering down to zero in the past few months, gold medallion and coin shipments jumped 1256 per cent in January as the industry remained clueless about the phenomenon. Meanwhile, import of rough diamonds, rough coloured gemstones, pearls and synthetic stones has been significantly down in the past three months owing to subdued demand and poor liquidity conditions.     

In January, exports of gold medallions and coins stood at Rs 1,856.04 crore against Rs 136.81 crore in the same month last year– a whopping growth of 1256 per cent, as per data of the Gems and Jewellery Export Promotion Council. Gold medallion and coin shipments have been coming down since August 2017 when the Commerce ministry banned the export of gold items above 22 carats of purity. The move was aimed at restricting the round-tripping in the form of gold, which was thought to be rampant in gold coins and medallions. Since gold medallions and coins contain 24 carats of the yellow metal, post-the ban, their exports started steadily declining. In 2016-17, the country had exported gold and medallions worth $5.4 billion and in the past few months the exports had tapered down to nil.

The industry could not pinpoint a reason for the jump in January. “I am surprised. As such we have not seen any increase in demand for medallions and coins,” said Rajesh Mehta, chairman of Rajesh Exports, a leading exporter of gold jewellery.

Meanwhile, the import of rough diamonds has been down 40 per cent in dollar terms and 37 per cent in quantity terms in January. Rough coloured gemstones were down by 77 per cent, rough pearls 56 per cent and rough synthetic stones 51 per cent. Rough imports have been down for the past few months in a row.

“The demand situation is grim in most of our markets. Exports to Hong Kong have been affected by the US-China trade war. Cold weather in the US has affected sales. The industry is cautious about the demand in the coming months,’ said Colin Shah, vice chairman of GJEPC.

According to Praveen Shankar Pandya, chairman of GJEPC, availability of bank finance has not yet normalized after the PNB fraud. ‘The industry is still suffering from the ill-effects of the fraud as banks are not willing to finance the industry,’ he said.

The drop in raw material imports will start reflecting in the export of processed goods in the coming months, he added. Gems and jewellery exports were down 7 per cent till January. According to Pandya, the initial months of next fiscal too will see exports shrinking due to the import decline.