Rise in Thailand's Jewelry Exports: Global Economy and Middle East Risks on the Agenda

Sumeth Pornsriroj chai, Director of Thailand's Gem and Jewelry Institute (GIT), announced that the country's jewelry exports will maintain their strong trajectory in the upcoming period. The biggest factor behind this positive picture is that international buyers are already accelerating their exports to manage uncertainties regarding US customs duties. Concerns over possible increases in supply chain and raw material costs are also among the elements driving companies to place early orders. Furthermore, the depreciation of the Thai Baht makes the country's products more competitive worldwide. All these factors combine to create a stable growth potential in Thailand's jewelry exports, excluding gold.

However, despite this bright picture, various risks in the global economy continue to emerge as the biggest threat elements looming over the sector. The G7 countries and the European Union issued stern warnings, drawing attention to the fragility of the global economy, a new wave of inflation, and the risks of trade wars. In particular, how the US's new trade and customs policies will take shape is widening the corridor of uncertainty for exporting firms. In addition, the re-ignited geopolitical crises and conflicts in the Middle East are seriously raising the overall risk perception of international trade. Experts emphasize that the potential devastating impacts of these global fluctuations on luxury consumer goods and the jewelry sector in the long run must be closely monitored.

Looking at the statistical data, Thailand's jewelry and gemstone exports, excluding gold, amounted to 860.73 million dollars in May, representing an increase of 1.82 percent compared to the same period of the previous year. When gold is included, the total export volume reached 2 billion 274.42 million dollars, experiencing a remarkable jump of 29.74 percent. Evaluating the first five months of the year, exports excluding gold surpassed the 7.3 billion dollar mark, growing by 11.11 percent. If gold trade is also included in this data, the total export volume for the said five-month period reached 15.6 billion dollars, achieving a tremendous growth momentum of 29.41 percent.

Thailand's gold exports, particularly in May, reached a volume of 1.4 billion dollars, creating an extraordinary increase of 55.75 percent. In this record-level increase, the continuation of gold purchases by numerous central banks globally and investors turning to gold in search of a safe haven were determinative. Additionally, the intense gold demand in the jewelry industry is among the details supporting this rise. In contrast, the gold ounce price in global markets entered a downward trend for three consecutive months due to the temporary easing of geopolitical tensions in the Middle East and asset sales by SPDR Gold, one of the world's largest gold funds. Although gold prices declined to 4 thousand 587 dollars according to recent data, gold exports reached 8.2 billion dollars throughout the year with a massive increase of 51.62 percent.

In terms of market diversity, Thailand's jewelry exports achieved significant growth figures in many important centers worldwide. While India grew by 2.84 percent, Hong Kong by 8.59 percent, and Germany by 41.77 percent, centers such as Switzerland and the United Arab Emirates stood out with very high growth rates of 67 percent. Developed markets such as Japan, Italy, and Belgium also painted a positive picture by realizing an increase in demand for Thai jewelry above the 30 percent band. In contrast, exports to the US, one of Thailand's largest markets, contracted by 11.37 percent in the following months because buyers built up stocks rapidly in earlier months. When examined by product groups, platinum jewelry, gold bullion, and silverware achieved miraculous growth rates, while small-scale declines were observed in the exports of silver jewelry and some processed gemstones.