JEWELLERY STOCKS REACH USD 5 BILLION?

THE postponement of the Istanbul Jewelry

Show, where 30-40 percent of the Turkish jewelry sector’s trade happens, the weakening gold trade in the domestic market, and the lack of tourists has led to $5 billion in stock to accumulation in the sector.

The jewelry sector was among the hardest hit by the coronavirus outbreak, with the Grand Bazaar closed for 70 days for the first time in its history, according to Mustafa Atayik, President of the Istanbul Chamber of Jewelry. Mustafa Kamar, President of the Jewelry Exporters’ Association, asked for the number of monthly payments to increase to 24 from 8 to support the sector. The stock of producers and wholesalers amounted to $4.5-5 billion due to the cancellation of various jewelry expos around the world, the lack of tourists, and the decreasing gold trade.

All the markets to which the Turkish jewelry sector sells are still closed, Kamar said, adding that the domestic market reopened with a 50-70 percent decrease in sales on June 1. Producers are in trouble since the government hasn’t provided any incentives except for the short-term work allowance. Some producers, after initially opening their businesses, have been forced to close again because of the lack of customers. This will cause issues in employment, Kamar said. “Regarding loans, banks are not eager to help at all, and that’s why we demand the number of monthly payments to increase to 18-24 months temporarily.”

BAR GOLD EXPORTS

A move to increase the number of monthly payments is necessary, especially for the upcoming wedding season, Kamar said, adding that roughly 600,000 weddings will take place this year. “If the government increases the number of monthly payments, it will benefit the factories,” he noted. Since the price of gold increased to TRY 380 from TRY 310 at the beginning of the year, access for gold became difficult. A total of 35,000 retailers, 6,000 producers, and 1,000 sub-sectors operate in Turkey across the sector. These places employ around 300,000 people. The declining demand also creates problems for exports, Kamar said.

The sector made a total of $7.5 billion in exports last year, but during the first six months of 2020, there’s been a shift in exported goods due to the fact that people have run out of backup savings. “While gold bar exports increased to $722 million from $429 million during the first six months of last year, the jewelry exports decreased to $448 million from $857 million during the same period.”

A total of 95 percent of producers, retailers, and shops had to close in Kuyumcukent, Vizyon Park, and Yenibosna districts as the exports of gold and jewelry halted, except gold bars.

Although some retail shops are still open in some districts, transactions have declined by 95 percent, according to Atayik. As Valentine’s Day and Mothers Day celebrations were canceled due to the outbreak, the business volume significantly contracted. “The start of the normalization period on June 1 and the beginning of the wedding season may offer some opportunities for jewelry stores to recover and disinvest,” Atayik said.

REVIVING THE DOMESTIC MARKET

With 150 stores and 250 outlets in Turkey, Turkish jewelry company Atasay agrees that the increased number of the monthly payment will provide relief to the sector, according to Atasay Kamer, CE• of the company. Kamer said while various sectors are taking advantage of the high number of monthly payments, the jewelry sector continues to suffer.

Mustafa Kamar, President of the Jewelry Exporters' Association: "Regarding loans, banks are not eager to help at all, and that's why we demand the number of monthly payments to increase to 18-24 months temporarily."