Jewellers urge Govt. to lift gold import ban

Saturday, 17 June 2023 00:15 - - {{hitsCtrl.values.hits}}

Restrictions have forced traders and industry to rely on old stocks and grey imports
Ban cause for Rs. 8,000 difference in local and global prices
Appreciation of the rupee has worsened crisis
Collaboration mooted between Govt., and industry stakeholders to find a solution

By Vikey Wignesh

Jewellers are calling on the Government to lift the ban on gold imports to ease upward pressure on prices and ensure industry’s viability. The All Island Jewellers Association Treasurer R. Balasubramaniam told the Daily FT the urgent need for the Government to reconsider the ban and emphasise that allowing gold imports will help reduce prices and stimulate the gold market.

Colombo’s Sea Street is renowned for its gold trade, and the prices set in this area serve as a benchmark for gold selling conditions across the country. Presently, the price of 24 karat gold stands at Rs. 163,000 per pawn (8 grams), while 22 karat gold is priced at Rs. 150,000 per pawn. The recent appreciation of the Sri Lankan rupee has caused gold prices, which had fallen in previous weeks, to rise again.

The industry argued that the ban on gold imports has significantly contributed to the increase in. Balasubramaniam pointed out that the ban has limited their business activities to relying solely on old gold jewellery sold by the public and small amounts of gold brought in by travellers from abroad. However, the restrictions on the amount of gold that passengers can bring into the country have led to a considerable decline in the inflow of gold. Consequently, the price of gold cannot be reduced substantially due to these constraints.

Balasubramaniam highlighted the price disparity between the international market and the domestic gold selling price, amounting to an average difference of Rs. 8,000. He emphasises that the primary reason for this discrepancy is the non-allowance of gold imports.

“Granting permission for gold imports would lead to a significant reduction in the price of gold, thereby making it more accessible and affordable for customers. The current economic conditions in the country, coupled with the high gold prices, have caused a decline in people’s interest in purchasing gold, negatively impacting the gold trade,” the All Island Jewellers Association official added.

The jewellers have been engaging with the Government at various levels to address the issue, but progress has been limited thus far. Balasubramaniam expressed the need for increased collaboration between the Government and industry stakeholders to find a solution.

“By lifting the import ban on gold, the Government can ensure the availability of a larger gold supply, which would not only benefit traders but also make gold more affordable for consumers, stimulating demand and fostering economic growth,” Balasubramaniam added.