Inflation-hit jewellers pray for good rains

Finally, jewellers are also banking on monsson to boost their business.

Jewellery business had seen a slump in Mumbai and Surat owing to the rising inflation and strengthening of rupee against the US dollar in the recent past.

According to traders in Surat, they are banking on a good monsoon and a good harvest to boost their businesses.

With the onset of monsoon Kharif sowing is underway in the country and harvesting will begin from September end.

If the monsoon is good, then the jewellery trade can expect a rise of 30 per cent to 35 per cent in gold sales in the November-December period.

According to the Met office, a good monsoon is expected in the country this year. The jewellery shop owners’ argument is that good rains increase farmers’ disposable income, which they traditionally invest in gold jewellery.

Kharif harvest will coincide with marriage season and festivals such as Navratri, Dussera, and Diwali that fall in October.

During this festival season people buy gold jewellery and the sale witnesses a rise of 35 per cent to 40 per cent.
India’s gold jewellery consumption has declined 30 per cent to 35 per cent quarter on quarter in April-June.

The demand for gold and gold jewellery has gone down because of the liquidity crunch due to inflation. High price of gold is another reason for the slackness.

However, the slowdown is likely to continue in July-September as it is not a marriage season and there are no major festivals.

India’s inflation rate rose to 11.5% in June and this has hit almost all the markets in the country.