Like other commodities, the jewelry business also witnessed slack during this Dashain, primarily due to shortage of cash and increasing in the price of yellow metal just before the Dashain festival began.
According to Tej Ratna Shakya, chairman of Nepal Gold and Silver Dealers Association (NEGOSIDA), the main reason behind the slowdown in jewelry business was the rise in the price of gold and cash shortage that gripped the country ahead of the festival season.
The price of the yellow metal was Rs 28,000 per 10 gram on September 2. But the price increased to Rs 29,860 per 10 gram on September 17, a week before the Dashain festival.
“The significance rise in price discouraged buyers which ultimately resulted in slowdown in business,” Shakya said, adding that the jewelry traders had expected good business during the festival because of stable price and favorable security situation in the country. Shakya rued the acute shortage of cash and increment in gold price ahead of the festival poured cold water on their hopes.
NEGOSIDA had targeted to sell an average of 20 kg gold per day during the Dashain festival against average daily sales of 15 kg on normal days. But the sales nosedived to almost half of the target. According to Shakya, gold traders had sold an average of 12 kg of gold a day during the Dashain festival last year.
Nirmal Krishna Shrestha, the owner of Gems Ornament Emporium, New Road, is one among many such jewelry traders who faced difficulty in dealing with his customers due to cash shortage. “We faced difficulties in dealing with customers as many banks had limited the amount of withdrawal during the festival,” Shrestha said. Though most of the customers wanted to transact using checks and through bank deposits, we weren´t used to such practice, he added. Shreshta, however, said that they did not witness slack in their business during the festival.
Manish L Pradhan, the director of Asri Jewelers in New Road, echoed Shrestha. Business at Asri, too, seems to have been affected by cash crunch. Asri, whose main focus is on diamond jewelries, however, witnessed surge in demand of diamond jewelries. “Of late, people have started going for diamonds, mostly for fashion reasons, and ornaments studded with stones are becoming even popular,” Pradhan informed.
Despite note shortage, this Dashain saw rise in the business of lighter, gold-plated and studded jewelries. Shakya informed that the business of gold-plated jewelries make up more than 25 percent of total gold business and the business volume is increasing every year.
Despite slack in business, there were some traders who took the festival as an opportunity to announce special offers and discount schemes on the sale of jewelries. They had offered discount on working charge, free silver coins on the purchase of gold, discount on selected diamond jewelries among others schemes.
While some traders term such discount galore as a way to survive in competitive market, others term it as superfluous. “The discount offers hold no ground and they are the ways to cheat customers,” Shakya said. He also said customers should be aware whether or not the traders offering attractive discounts are selling authentic products. “Many charge hefty price and offer discounts,” Shakya said, adding: “Investment in gold is a lifetime investment. We request people to purchase only from authentic places.”
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