ISTANBUL – Turkish jewelers, hit by volatile world gold prices in 2006, aim this year to use popular gems, especially diamonds, to lure customers and boost their exports amid rising competition from Asia. Gold jewelry exports from Turkey, one of the world’s top three exporters along with India and Italy, fell 22.4 percent to 85.8 tons in 2006 as high and volatile world gold prices dented demand. Sector officials are upbeat about 2007 but highlight the need to focus more on brands and design to overcome Chinese competition. «China and Far Eastern countries export plain gold jewelry. But with prices at these levels it is impossible to compete with these countries by only offering gold jewelry,» Mutlu Oktem, secretary-general of the Istanbul Precious Metals Exporters Association, told Reuters. «Many firms have started to prepare diamond-oriented collections. In 2007 we will use diamonds more to offer value-added products because the trends are changing and the customers expect us to keep up,» he said. World gold prices gained 23 percent in 2006 after an 18 percent rise in 2005. After hitting a 26-year peak of $730 an ounce in May 2006, prices have retreated back towards $600 and traded at $628 an ounce last week. «Rising demand for diamonds is also very positive for gold jewelry. They complement each other,» said Cetin Binatli, board member of leading Turkish jewelry maker Goldas. He expected world gold prices to remain above $600 this year but said consumer demand would recover once the fluctuations in prices narrowed. Turkey’s gold jewelry exports edged down in value by 1.94 percent to $980.8 million in 2006 and sector officials estimate that figure will reach $1.2 billion this year. Rapid growth in diamonds «To offer more value-added products to the world markets, Turkish wholesalers’ demand for diamonds has increased in recent years,» said Sebnem Balkan, former manager of Turkey’s Diamond Information Center. The center is run by the sales and marketing arm of the world’s biggest diamond group De Beers, the Diamond Trading Company (DTC). Balkan estimated diamond sales rose by some 10 percent in 2006 and expected growth to stay around that level in 2007. «Since sales are very much related with the economic environment. .. In 2007 the market could be more subdued due to economic and political issues like upcoming elections. It could grow 10-15 percent at most,» she said. Turkey imports diamonds from Israel, India and Belgium. According to DTC data, the largest diamond market is the United States, followed by China and Italy. Goktay Bayraktar, regional director for diamonds at major Turkish jewelry producer Altinbas, said the shift in global jewelry trends towards diamonds had also affected Turkish customers. High prices for gold also encouraged buyers to seek flashier items to justify the high prices paid. «The customers think, ‘I am paying lots of money for gold, why not pay a bit more and buy diamonds and I can keep them forever.’ This approach has increased demand,» he said. Bayraktar said Altinbas’s domestic diamond sales were up around some 40 percent in 2006 and he expected that to be repeated this year.