A buyer currently has to spend about Tk 95,000 per bhori, including VAT and making costs, to buy gold jewellery. Compared to last year, the price has gone up 18% this year– Shamsul Haque Ripon

The jewellery market witnessed massive drops in sales in December with inflation biting hard into customers’ pockets.

Traders said December-February is supposed to be the peak season for them as the number of weddings and other social events jumps during this period. But an inflated market and a hike in gold prices have resulted in huge sales drops of 25-50 per cent compared to the last year even with the discounts they have offered.

During visits to various jewellery shops around Dhaka city, including the ones at Baitul Mukarram Market, The Business Post found only a few customers at some shops, while some shops were empty.

Even shops of renowned brands like Sananda Jewellers, Amin Jewellers and Apon Jewellers are suffering massive drops in sales.

Traders said most of the customers are buying light and small pieces of jewellery at present as they want to avoid spending extra money.

Inflation bites
Bidhan Malaker, the owner of Venus Jewellers Ltd, told The Business Post that currently, a buyer spends around Tk 95,000, including VAT and manufacture costs, to buy one bhori gold. Compared to last year, the price has gone up by 18 per cent this year.

At the same time, the price of all essentials and event organising costs have also increased by at least 10-15 per cent compared to last year, he said. “Customers have lost their purchasing power. Those who planned to buy at least 10 bhoris of gold are now choosing to buy 4-5 bhoris.”

Jahangir Alam, a buyer at Baitul Mukarram jewellery market, said, “I had a budget to buy six bhoris of gold jewellery for my daughter’s wedding, but now we can buy five bhoris with that money.”

According to Bidhan, jewellery sales in this market have dropped by up to 50 per cent at many shops in recent weeks.

Discounts failing
According to Bangladesh Jeweller’s Association (BAJUS), the current gold price is 17 per cent higher compared to December 2021.

Since December 29, 2022, the 22-carat gold was being sold at a record Tk 88,413 per bhori, against Tk 74,300 per bhori in 2021.

The amount of VAT has also increased, traders said. Previously, a buyer would have to pay Tk 3,700 as VAT per bhori gold. Now they need to pay nearly Tk 4,500 following the recent price hike.

At the same time, the jewellery manufacturing charge varies between Tk 1,750 and Tk 2,332 per bhori depending on the design.

Sananda Jewellers Managing Director Ranjit Ghosh said, “Many buyers do not want to pay the jewellery-making charges due to the price hike. But we have to pay the workers.”

However, he said, “We are giving discounts on the jewellery-making cost to sustain our business by attracting more buyers.”

Ranjit also said that apart from the price hike and inflation, many people are buying less jewellery due to the fear of a recession in near future.

“If this continues, it will be difficult for businesses like us to survive.

As per our calculation, jewellery sales have fallen by a quarter,” he said.