Thai Jewelry 09

The Gem and Jewelry Institute of Thailand (Public Organization) Thailand’s Gems and Jewelry Import-Export Performance in 2009 Overview In 2009, the value of Thai gems and jewelry export expanded at the rate of 18 percent approximately, while the import value decreased by about 36 percent, causing Thailand to have a trade surplus of 3,762.91 million US dollars in the gem and jewelry category.

Regarding Thailand’s gems and jewelry import-export under Customs Tariff Schedule Chapter 71*, it was found that in 2009 the export value increased by 18.03 percent from 8,270.07 million US dollars to 9,761.40 million US dollars. Gems and jewelry were the third important export products, accounting for 6.40 percent of Thailand’s total export value. Meanwhile, the import value of such products reduced by 36.18 percent from 9,398.72 million US dollars to 5,998.49 million US dollars. Gems and jewelry ranked eighth of Thailand’s highest import value, accounting for 4.48 percent of the total import value.

If considering a trade balance of only gems and jewelry products, it was found that in 2009 Thailand earned a trade surplus of 3,762.91 million US dollars. This was the highest trade surplus in a decade since 2000, as illustrated in Figure 1.

Figure 1: Import-Export Value of Thailand’s Gems and Jewelry during 2000-2009

Source: The Gem and Jewelry Institute of Thailand (Public Organization)

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Gems and Jewelry Import-Export Performance Export Performance The most important export product in this category was unwrought or semi-manufactured gold, which accounted for 58.06 percent of Thailand’s total gems and jewelry export value. In 2009, the export value of this product grew 67.49 percent due to a continuous increase in gold prices in the global market. The average gold price in December was 1,134.72 US dollars per ounce. This was the phenomenon in which gold prices increased by the highest rate in ten years, causing more unwrought or semi-manufactured gold to be exported in order to make profits.

The product with the second highest export value was jewelry. Its export value declined by 12.52 percent, accounting for 25.53 percent of Thailand’s total gems and jewelry export value. When considering each type of products, it was found that the export of gold jewelry reduced by 24.46 percent and that of silver jewelry increased by 11.11 percent. As for platinum jewelry, the export dropped by 15.29 percent.

The next important product was diamonds which accounted for 8.83 percent, decreasing by 25.85 percent. It was found that most diamonds exported were cut and polished diamonds which reduced by 15.99 percent. With respect to other important products, colored stones declined by 23.56 percent, imitation jewelry rose by 7.71 percent, and synthetic stones reduced by 15.33 percent, as shown in Table 1.

Table 1: Export Value of Thailand’s Gems and Jewelry from January to December 2008 & 2009 Categories

Value (Million US$)

Share (Percent)

Change (Percent)

Jan-Dec 08

Jan-Dec 09

Jan-Dec 08

Jan-Dec 09

1. Unwrought Gold or Semi-Manufactured Gold

3,383.67

5,667.46

40.91

58.06

67.49

2. Jewelry

2,848.80

2,492.06

34.45

25.53

-12.52

860.64

956.29

10.41

9.80

11.11

1,838.34

1,388.69

22.23

14.23

-24.46

30.71

26.02

0.37

0.27

-15.29

119.12

121.06

1.44

1.24

1.63

1,103.64

818.36

13.35

8.38

-25.85

3.1 Rough

264.13

112.09

3.19

1.15

-57.56

3.2 Polished

839.11

704.92

10.15

7.22

-15.99

0.40

1.35

0.00

0.01

234.70

519.31

396.94

6.28

4.07

-23.56

19.72

16.44

0.24

0.17

-16.60

4.2 Polished precious stones

254.89

178.74

3.08

1.83

-29.88

4.3 Polished semi-precious stones

244.70

201.76

2.96

2.07

-17.55

5. Imitation Jewelry

197.77

213.02

2.39

2.18

7.71

2.1 Silver jewelry 2.2 Gold jewelry 2.3 Platinum jewelry 2.4 Others 3. Diamonds

3.3 Others 4. Colored Stones 4.1 Rough

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Gems and Jewelry Import-Export Performance Table 1: Export Value of Thailand’ss Gems and Jewelry from January to December 2008 & 2009 Value (Million US$)

Categories

Jan-Dec 08

6. Synthetic Stones 7. Others

Total (1+2+3+4+5+6+7)

Jan-Dec 09

Share (Percent cent)

Change

Jan-Dec 08

Jan an-Dec 09

(Percent)

70.81

59.96

0.86

0.61

-15.33

146.06

113.60

1.76

1.17

-22.22

8,270.07

9,761.40

100.00

100.00

18.03

Source: The Gem and Jewelry Institute of Thailand (Public Organization)

The most important market for gems gem and jewelry exports in 2009 was Switzerland, erland, with the export value of 27.01 percent which expanded nded 1.09 times. The major export product was as unwrought or semimanufactured gold which accounted ed for about 94 percent of the total export value, ue, g growing 1.48 times from the previous year.

Other major markets for exporting porting Thai gems and jewelry were Australia, Hong Kong, the United States and Belgium, with the export rt value of 21.05, 19.59, 8.61 and 2.70 percent respectively. espectively. The reason why the value of gems and jewelry y exports to Australia and Hong Kong increased d by 44 and 25 percent was that most export products were ere unwrought or semi-manufactured gold which ch grew by 47 and 43 percent respectively. Meanwhile, the he export value to the United States reduced by 21.

21.86 percent. Jewelry, which accounted for 82 percent, remained mained tthe major product that Thailand exported ed to the United States.

However, the export value decreased ed by 16.01 percent. The chief factor was that the he export value of gold jewelry dropped by 43 percent, although though the export value of silver jewelry could d expand by about 25 percent.

Figure 2: Thailand’s land’s Gem Gems and Jewelry Export Markets in 2009 09 Australia 21.05%

Switzerland 27.01%

Hong Kong ong 19.59% %

Others 11.01%

United States 8.61% Belgium Denmark nmark 1.82% 82% United ArabGermany Japan United Kingdom 2.70% Emirates 2.25% 1.99% 2.00% 1.97%

Source: The Gem m and Jewelry Institute of Thailand (Public Organization) on)

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Gems and Jewelry Import-Export Performance Export markets with growth potential include some countries in the Middle East, especially Qatar and Bahrain in which the export value increased by 142.70 and 35.10 percent respectively. The export product to these markets which had the high expansion rate was gold jewelry. As for Denmark, most export products were silver jewelry, expanding at the rate of 35.76 percent.

In addition, Table 2 shows that Pacific Island countries such as Australia and New Zealand were new markets with a continuous increase in the export value during 2006-2009. These markets also have a tendency to grow continuously. At the same time, Thailand’s major export markets including the United States, the European Union and Japan had the continually declining shares of the total export value, and the expansion rate in each year was rather low. Particularly in 2009, the export value apparently reduced.

Moreover, all new markets such as China, India, Russia and CIS countries, Middle East countries as well as ASEAN had the decreasing shares of the total export value in 2009 due to the global economic crisis.

Table 2: Export Value of Thailand’s Gems and Jewelry to Other Regions during 2006-2009 Country/Region

Value (Million US$) 2006

2007

2008

Share (Percent) 2009

2006

2007

2008

Change (Percent) 2009

07/06

08/07

09/08

United States

915.09

1,026.62

1,075.96

840.74

25.38

19.08

13.01

8.61

12.19

4.81

-21.86

European Union

951.00

1,150.67

1,500.48

1,234.21

26.37

21.38

18.14

12.64

21.00

30.40

-17.75

Japan

161.06

191.17

222.17

194.97

4.47

3.55

2.69

2.00

18.70

16.21

-12.24

China

8.28

13.94

12.01

11.60

0.23

0.26

0.15

0.12

68.36

-13.84

-3.41

India

50.67

93.72

155.37

139.12

1.41

1.74

1.88

1.43

84.98

65.78

-10.46

Russia and CIS countries

20.24

30.44

48.42

23.44

0.56

0.57

0.59

0.24

50.45

59.04

-51.59

457.85

587.07

668.10

407.77

12.70

10.91

8.08

4.18

28.22

13.80

-38.97

82.68

89.14

220.31

73.32

2.29

1.66

2.66

0.75

7.81

147.16

-66.72

Pacific Island countries

287.33

607.67

1,436.52

2,059.63

7.97

11.29

17.37

21.10

111.49

136.40

43.38

Others

671.72

1,590.93

2,930.73

4,776.60

18.63

29.56

35.44

48.93

136.84

84.21

62.98

3,605.92

5,381.39

8,270.07

9,761.40

100.00

100.00

100.00

100.00

49.24

53.68

18.03

Middle East countries ASEAN

Total

Source: The Gem and Jewelry Institute of Thailand (Public Organization)

Import Performance In 2009, the import value of gems and jewelry decreased by 36.18 percent. The product with the highest value remained unwrought or semi-manufactured gold which accounted for 63.10 percent of the total gems and jewelry import value, followed by diamonds accounting for 12.91 percent. The product which ranked third was silver, with 8.68 percent share. The import value of unwrought gold, diamonds and silver reduced by 37.63, 50.11 and 5.89 percent respectively.

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Gems and Jewelry Import-Export Performance Other import products including jewelry, colored stones and synthetic stones accounted for 8.45, 3.89 and 0.85 percent share respectively. The import value of these products dropped by 23.21, 34.43 and 33.15 percent respectively. However, about 90 percent of import products remained raw materials, as illustrated in Table 3.

Table 3: Import Value of Gems and Jewelry to Thailand from January to December 2008 & 2009 Categories

Value (Million US$)

Share (Percent)

Change (Percent)

Jan-Dec 08

Jan-Dec 09

Jan-Dec 08

Jan-Dec 09

1. Unwrought or Semi-Manufactured Gold

6,068.99

3,785.32

64.57

63.10

-37.63

2. Diamonds

1,551.70

774.16

16.51

12.91

-50.11

513.31

175.28

5.46

2.92

-65.85

1,022.42

590.22

10.88

9.84

-42.27

15.96

8.66

0.17

0.14

-45.76

3. Silver

553.24

520.66

5.89

8.68

-5.89

4. Jewelry

660.25

507.02

7.02

8.45

-23.21

4.1 Silver jewelry

54.50

46.65

0.58

0.78

-14.40

4.2 Gold jewelry

535.72

427.34

5.70

7.12

-20.23

8.95

8.33

0.10

0.14

-6.87

61.09

24.69

0.65

0.41

-59.58

356.21

233.56

3.79

3.89

-34.43

19.07

18.11

0.20

0.30

-5.01

5.2 Polished precious stones

154.92

101.76

1.65

1.70

-34.31

5.3 Polished semi-precious stones

182.23

113.68

1.94

1.90

-37.62

76.54

51.17

0.81

0.85

-33.15

131.79

126.62

1.40

2.11

-3.92

9,398.72

5,998.49

100.00

100.00

-36.18

2.1 Rough 2.2 Polished 2.3 Others

4.3 Platinum jewelry 4.4 Others 5. Colored Stones 5.1 Rough

6. Synthetic Stones 7. Others

Total (1+2+3+4+5+6+7)

Source: The Gem and Jewelry Institute of Thailand (Public Organization)

The most important import source was Switzerland with the import share of 27.29 percent, decreasing by 43.30 percent. Most of the products imported from Switzerland were unwrought or semimanufactured gold. Other major import sources were Australia, Hong Kong, Thailand and China with the import shares of 16.14, 13.27, 7.25 and 5.47 percent respectively. The main product which Thailand imported from Australia and Hong Kong was unwrought gold. China was Thailand’s important source for importing silver, while most of the products imported from Thailand were jewelry sent back after being exported to exhibit in gems and jewelry fairs in foreign countries.

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Gems and Jewelry Import-Export Performance Figure 3: Thailand’s land’s Gem Gems and Jewelry Import Sources in 2009 09 Australia 16.14% Switzerland 27.29%

Hong Kong ong 13.27% %

Thailand land 7.255% Others 13.08% M Malaysia United States Japan Republic of Korea 2.40% 3.85% 2.71% 3.74%

India 4.81%

China 5.47%

Source: The Gem m and Jewelry Institute of Thailand (Public Organization) on)

Conclusion Overall, the export value of Thailand’s gems gem and jewelry throughout the year ear 2009 expanded by 18.03 percent. Nevertheless, if considering idering the export value of gems gem and jewelry products under various criteria in order to know real potential ial of Thai gems and jewelry products, it was found nd that -

The export value of Thailand’s ailand’s major products including diamonds, colored lored stones, synthetic stones, jewelry and imitation tion jewelry decreased by 16.03 percent.

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The export value of Thailand’s hailand’s gems and jewelry, excluding that off unwrought or semimanufactured gold, reduced ced by 16.22 percent.

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The export value of Thailand’s hailand’s gems and jewelry, excluding that off unwrought or semimanufactured gold and the he import value of products sent back after being g exported to exhibit in gems and jewelry fairs in foreign countries, dropped by 13.00 percent.

According to the above information, nformation, it was found that the export value of gems and jewelry

products, which had the relatively high rate of expansion, expansion resulted from the export of unwrought or semimanufactured gold. On the contrary, ry, the export value of other major products declined eclined due to trading partners’ economic downturn. However, wever, GIT Gem and Jewelry Information Center expects that in 2010 the export value of Thai gems and jewelry welry (excluding unwrought gold) will increase about a 3-5 percent. The product which has considerable export port potential is silver jewelry.

A major factor which will affect ect the export value of Thai gems and jewelry is economic e growth in the major markets including the United d States, Japan and the Europ European Union. It is expected xpected that economic growth in these markets will be positive itive in 2010, causing consumption demands to gradually radually rise.

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Gems and Jewelry Import-Export Performance Meanwhile, consumer markets which have had the increasing importance such as China, India, Russia, Australia and the Middle East still have good economic performance. Furthermore, Thailand’s GSP eligibility for gems and jewelry products has been renewed for one more year. Therefore, Thai gems and jewelry products, particularly silver jewelry, have still gained a competitive advantage in the United States.

However, there are some risks from negative factors including fluctuations in exchange rates and the value of the baht which tends to be stronger compared to the US dollar. These may reduce Thai product’s competitive advantage. Moreover, there has been more fierce competition from rival countries to grab shares in the global market.

Therefore, Thai exporters have to focus on differentiating their products through design skills and modern production technology. In addition, they should penetrate new markets with high potential such as China, India, Russia and Middle East countries, together with Australia which has Free Trade Agreement with Thailand. Even though the export value to these markets is still low compared to the total gems and jewelry export value, there is a tendency of continuous growth. Moreover, competition in these markets has not been extremely fierce. Thus, Thai exporters should not overlook these alternative markets.

Gem and Jewelry Information Center The Gem and Jewelry Institute of Thailand (Public Organization) 26 January 2010

* Chapter 71 Natural or cultured pearls, precious or semi-precious stones, precious metals, metal clad with precious metal and article thereof; imitation jewelry; coin

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