Exports of gold, jewelry take a leap
Güncelleme Tarihi:
by Bahadır Özgür - Referans
Oluşturulma Tarihi: Nisan 14, 2009 00:00
ISTANBUL - Discrepancy in export figures by the Turkish Exporters Assembly and the Turkish Statistical Institute reveal a success story: Gold, jewelry and precious stone sectors have taken giant leaps in reaching out to the world, competing with backbone sectors of the economy. Under-the-mattress gold enters the market in these hard times, as it is reprocessed and exported
With the locomotives of the Turkish economy hard-hit by the global crisis, the gold, jewelry and precious stone sectors are competing with the automotive industry in exports.
As under-the-mattress gold enters the market due to the economic hardships, it is being reprocessed into bullion, bringing a new dynamism to Turkey’s exports. Exports of pearls and other precious stones are also on the rise. Last year, the sector as a whole reached $5 billion in exports, but it has already reached $2.6 billion in the first two months of this year.
Figures show Turkey is rapidly becoming a hub for processing precious stones and metals. In February, the sector hit an export volume of $1.6 billion, mostly in jewelry and gold. Reaching alternative markets in Asia and the Middle East, sector players are outscoring their European rivals.
More than 50 large companies, those with between 200 and 1,500 employees, are active in Turkey’s precious metals and jewelry sector. As a whole, the sector employs nearly 250,000 people. Istanbul is its most important production center, followed by Ankara and İzmir. Gold and jewelry production also has a significant presence in some eastern and southeastern Anatolia cities.
Tax exemptions
The key reason behind the sector’s export success, which started to rise after the 2001 crisis, is the tax exemption on pure gold trade. Leading firms request that the government now reduce the 20 percent Special Consumption Tax. If this happens, the success attained in gold exports may be repeated with other precious metals, sector representatives say.
Analyzing the rise in exports despite the crisis, Murat Güvenç, a barter expert at the Gold Exchange, said the economic woes have resulted in a supply of scrap gold this year, helping Turkey become a key exporter, as opposed to the gold importer it traditionally was in the past.
"Comparing figures by the Turkish Statistical Institute, or TÜİK, and the Turkish Exporters’ Assembly, or TİM, one sees a positive difference of $960 million in TÜİK figures," Güvenç said. "The majority of this figure results from gold bullion exports." As citizens sell off their gold to jewelry stores, refineries turn it into bullion, trade it at the Istanbul Gold Exchange and then export it, he explained.
As people sell off their gold to the more than 40,000 jewelry stores throughout the country, gold refineries turn it into bullion, trade it at the Istanbul Gold Exchange and then export it, he explained. The biggest export destinations are Britain and Switzerland.
"Turkey has a great potential in jewelry and precious stones," Güvenç told daily Referans. "With the crisis, it leapt to number two, after Italy, in gold exports." In jewelry, meanwhile, large orders from Asian countries have increased activity. At the moment, the biggest export market is the United States. But as the United States has started imposing customs tax on jewelry, exports have contracted by 45 percent, while demand from countries such as Azerbaijan, Kazakhstan, Kyrgyzstan and Turkmenistan is rising.
According to export data from TÜİK, the United States and Western Europe are still the biggest export markets, but countries in the Caucasus and Asia are increasingly important. Kazakhstan, for example, imported $31 million worth of jewelry in 2007, a figure that rose to $50 million last year. In the first month of this year alone, exports to Kazakhstan totaled $5.8 million.
Turkmenistan has become another key market. In 2006, Turkish exporters sold $19,000 in jewelry to the country; in 2008, this figure jumped to $22 million. In the first two months of this year, $1.8 million in jewelry was exported to Turkmenistan.
The most important markets for exports of gold ornaments have historically been the United Arab Emirates, the United States and Russia. But exports to these markets have declined as a result of the crisis.
In exports of silver ornaments, the United States tops the list, buying $13.5 million, but Romania and Poland are also key markets. In imitation jewelry, Syria stands out, with $600,000 in imports from Turkey.
TURKEY’S JEWELRY SECTOR
* Has the capacity to process 400 tons of gold and 200 tons of silver annually.
* Ranks among the top five in the world in jewelry production.
* Is often seen as a formidable rival to Italy, the top producer.
* Includes more than 50 large companies, each employing 200 to 1,500 workers.
* Employs a total of nearly 250,000 people. Istanbul is the key production center, followed by Ankara and İzmir.
As under-the-mattress gold enters the market due to the economic hardships, it is being reprocessed into bullion, bringing a new dynamism to Turkey’s exports. Exports of pearls and other precious stones are also on the rise. Last year, the sector as a whole reached $5 billion in exports, but it has already reached $2.6 billion in the first two months of this year.
Figures show Turkey is rapidly becoming a hub for processing precious stones and metals. In February, the sector hit an export volume of $1.6 billion, mostly in jewelry and gold. Reaching alternative markets in Asia and the Middle East, sector players are outscoring their European rivals.
More than 50 large companies, those with between 200 and 1,500 employees, are active in Turkey’s precious metals and jewelry sector. As a whole, the sector employs nearly 250,000 people. Istanbul is its most important production center, followed by Ankara and İzmir. Gold and jewelry production also has a significant presence in some eastern and southeastern Anatolia cities.
Tax exemptions
The key reason behind the sector’s export success, which started to rise after the 2001 crisis, is the tax exemption on pure gold trade. Leading firms request that the government now reduce the 20 percent Special Consumption Tax. If this happens, the success attained in gold exports may be repeated with other precious metals, sector representatives say.
Analyzing the rise in exports despite the crisis, Murat Güvenç, a barter expert at the Gold Exchange, said the economic woes have resulted in a supply of scrap gold this year, helping Turkey become a key exporter, as opposed to the gold importer it traditionally was in the past.
"Comparing figures by the Turkish Statistical Institute, or TÜİK, and the Turkish Exporters’ Assembly, or TİM, one sees a positive difference of $960 million in TÜİK figures," Güvenç said. "The majority of this figure results from gold bullion exports." As citizens sell off their gold to jewelry stores, refineries turn it into bullion, trade it at the Istanbul Gold Exchange and then export it, he explained.
As people sell off their gold to the more than 40,000 jewelry stores throughout the country, gold refineries turn it into bullion, trade it at the Istanbul Gold Exchange and then export it, he explained. The biggest export destinations are Britain and Switzerland.
"Turkey has a great potential in jewelry and precious stones," Güvenç told daily Referans. "With the crisis, it leapt to number two, after Italy, in gold exports." In jewelry, meanwhile, large orders from Asian countries have increased activity. At the moment, the biggest export market is the United States. But as the United States has started imposing customs tax on jewelry, exports have contracted by 45 percent, while demand from countries such as Azerbaijan, Kazakhstan, Kyrgyzstan and Turkmenistan is rising.
According to export data from TÜİK, the United States and Western Europe are still the biggest export markets, but countries in the Caucasus and Asia are increasingly important. Kazakhstan, for example, imported $31 million worth of jewelry in 2007, a figure that rose to $50 million last year. In the first month of this year alone, exports to Kazakhstan totaled $5.8 million.
Turkmenistan has become another key market. In 2006, Turkish exporters sold $19,000 in jewelry to the country; in 2008, this figure jumped to $22 million. In the first two months of this year, $1.8 million in jewelry was exported to Turkmenistan.
The most important markets for exports of gold ornaments have historically been the United Arab Emirates, the United States and Russia. But exports to these markets have declined as a result of the crisis.
In exports of silver ornaments, the United States tops the list, buying $13.5 million, but Romania and Poland are also key markets. In imitation jewelry, Syria stands out, with $600,000 in imports from Turkey.
TURKEY’S JEWELRY SECTOR
* Has the capacity to process 400 tons of gold and 200 tons of silver annually.
* Ranks among the top five in the world in jewelry production.
* Is often seen as a formidable rival to Italy, the top producer.
* Includes more than 50 large companies, each employing 200 to 1,500 workers.
* Employs a total of nearly 250,000 people. Istanbul is the key production center, followed by Ankara and İzmir.