ECONOMY

Jewelers face price war

ISTANBUL – Lower volatility in gold prices could bring back demand for Turkish jewelry in 2007 but Turkey needs to work harder on branding to overcome growing Chinese competition, Turkey’s leading jewelry maker said yesterday. High and volatile world gold prices dented consumers’ and producers’ appetite for Turkish gold jewelry, resulting in a 28.6 percent fall in bullion imports to Turkey and a 22.4 percent fall in gold jewelry exports, measured by weight, in 2006. «Price fluctuations in 2006 caught everyone off guard… This year I think the prices will remain high but I do not expect such volatility in prices,» Cetin Binatli, board member of Turkey’s only listed jewelry maker Goldas, told Reuters in an interview. Spot gold prices gained 23 percent in 2006, peaking at a 26-year high of $730 an ounce in May. Prices traded at $628.20 an ounce yesterday. Binatli said there has been unexpectedly strong demand in the first days of this year, when prices were easing. However, a recent rebound in prices has cut demand again. Turkey’s gold jewelry exports fell to 85.8 tons last year, equivalent to $980.8 million. Binatli said he expected to exceed these levels in 2007 but said it would be difficult to reach the $1 billion level seen in 2005. Binatli said due to fierce competition in 2006, Turkey lost its third position in its biggest export market the United States, to rival China. «China is a very big threat and I think the competition will even increase this year… Wholesalers’ priority is price and China will continue to offer far more competitive prices,» he said. «The only way to bypass wholesalers is to promote the brand. Only that way can we reach retail customers directly.» According to exporters’ data, Turkey’s gold jewelry exports to the United States fell 33.02 percent to 26.5 tons last year. Binatli said Goldas was considering buying a chain store abroad in a bid to use branding to overcome such competition.