Gold-leaf pro­duc­ers feel price pinch

The Myanmar Times - - News - Khin­suwai@mm­ KHIN SU WAI

GOLD-LEAF pro­duc­ers in Man­dalay are feel­ing the squeeze, as ris­ing gold prices, com­mer­cial tax and the mon­soon sea­son take their toll on the in­dus­try.

De­spite hav­ing cus­tomers na­tion­wide in the form of pago­das, the goldleaf in­dus­try is in a sorry state, busi­ness own­ers say.

With gold prices on an up­ward tra­jec­tory, es­ti­mat­ing the cost of a pro­ject in or­der to sub­mit a ten­der be­comes a tricky propo­si­tion, with some gold-leaf sell­ers say­ing they find them­selves ab­sorb­ing sig­nif­i­cant losses.

The in­ter­na­tional gold price in­creased from US$1058-$1061 per ounce in the first week Jan­uary to $1335-$1343 in the third week of Au­gust.

This has driven lo­cal gold prices up to K860,000 per tical (a tra­di­tional mea­sure­ment for the com­mod­ity, equal to 0.576 ounces or around 16 grams).

“The gold price al­ways goes up,” Daw Nwe New of Shwe Hninsi Gold Leaf told The Myan­mar Times.

Daw Thin Thin Htwe of Sein Thiha gold leaf said she has also ex­pe­ri­enced dif­fi­cul­ties with ten­ders in the past as a re­sult of price vari­abil­ity.

“Af­ter we ac­cepted the ten­der for Bago’s Sh­we­maw­daw Pagoda, the gold price in­creased sharply. But we are work­ing with the con­tract. We faced a loss but we must give them the gold leaf as per the con­tract. If the pagoda gave us the gold for the gold leaf, we would not worry about the price,” she said.

Or­ders of gold leaf are made ac­cord­ing to size spec­i­fi­ca­tions made by the client. The most com­mon size or­dered is around 2 square inches, which sells for about K39,000 for a pack of 100.

On top of gold price woes, com­mer­cial tax presents an­other is­sue for sup­pli­ers.

“In the past, we paid K200,000 [$170] for tax. But this year, the tax has in­creased. For ex­am­ple, Ma­hamuni Pagoda bought gold leaves from us for about K30 mil­lion [$26,000] in 2015. We have paid K1.6 mil­lion [$1350] in taxes this year,” Daw Thin Thin Htwe said, adding that gold leaf pro­duc­ers face ad­di­tional ex­penses in­clud­ing wages, raw ma­te­ri­als and in­dus­try reg­is­tra­tion fees.

She said gold-leaf work­ers – who use tra­di­tional, labour-in­ten­sive means to cre­ate the thin sheets of gold – are also likely to re­ceive a pay rise once the mon­soon sea­son is over, fol­low­ing com­plaints by em­ploy­ees.

“The price of gold leaf will in­crease, but all gold-leaf busi­nesses need to con­sider this care­fully be­cause our prod­ucts are for pago­das,” she said.

Daw Nwe Nwe said the gold-leaf mar­ket is a crowded game th­ese days. “When I was young, there were 20 to 30 [gold-leaf pro­duc­ers], but now there are over 100,” she said.

Pago­das put out a call for ten­ders at set in­ter­vals: For some it is once ev­ery three years, for others ev­ery six months. Some do it as of­ten as ev­ery six weeks. Shwe Hninsi Gold Leaf

Man­dalay’s Ma­hamuni Pagoda called for ten­ders five times last year. Over 100 bids were made on the first ten­der, with 66 busi­nesses re­ceiv­ing or­ders.

Myan­mar’s gold-leaf pro­duc­ers have also faced com­pe­ti­tion from neigh­bour­ing Thai­land, where non­hand­made al­ter­na­tives have en­tered the mar­ket.

“That was used in Sh­wedagon,” said Daw Nwe Nwe. “But most [pago­das] like our hand­made prod­ucts. Our prod­ucts are tra­di­tional, hand­made art­work.”

‘When I was young, there were 20 to 30 [gold-leaf pro­duc­ers], but now there are over 100.’

Daw Nwe Nwe

Photo: Khin Su Wai

A worker pounds gold into thin sheets in Man­dalay.

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