Turkish jewelry exporters seeking new markets after Russia losses

ISTANBUL - Reuters

AA Photo

Turkish jewelry producers aim to increase their exports by 30 percent to $3.5 billion this year by focusing on new markets, after seeing decreases of around 15 percent in year-on-year exports in 2015 amid the loss of one of their key markets, Russia.  

“Russia and the Turkic republics have been our key markets, but Russian economic activities have ground to a halt since the Ukraine crisis. This has also negatively affected Russia’s neighboring countries including the Turkic republics,” said Jewelry Exporters Association (MİB) head Ayhan Güner, adding that the jet crisis between Turkey and Russia has worsened the situation. 

The sector’s exports fell in the last three months of 2015 amid the crisis after Turkey shot down a Russian jet on the Syrian border and the huge refugee inflow, although the sector had shown a good performance in the first nine months of the year. 

According to MİB data, jewelry exports - excluding plate gold sales - fell by 14.6 percent to $2.65 billion in 2015 compared to the previous year, though exports increased by 9.77 percent on a weight basis to 3,500 tons. 

Güner said the main reason behind the drop in exports on a value basis was the plunge in the gold price. 

“While the gold price was around $50,000 per kilo two years ago, this figure has now slumped to around $32,000-33,000. If the gold price had not declined, our exports would have increased by 30 percent on a value basis,” he said. 

The biggest decline was seen in the Russian market, which fell by around 71 percent in 2015 compared to the previous year. The sector also saw a fall in sales to Iran, the United Arab Emirates (UAE), Hong Kong, Germany, Kyrgyzstan, Belgium and Kazakhstan. 

 “We aim to boost our exports to $3.5 billion despite all these hurdles. As we have lost the Russian market, we are focusing on new markets, including the Far East and the Americas as well as Europe. Great potential in these markets make us optimistic,” Güner stated. 

According to MİB data, Turkey’s jewelry exports to Mexico increased by 27.27 percent, Lebanon by 21.67 percent and the U.S. by 15.84 percent last year from 2014. The sector also boosted its exports to Israel, Italy, Singapore, Poland, Britain and Romania. 

Güner noted that his association will organize two fairs in March and October. 

“The general outlook of this year’s exports will start to become clearer after the fairs. For instance, China’s largest 15 store chains - with more than 4,000 stores - will attend the fairs for the first time. With just their orders we’ll be able to reach our export target,” he said. 

Saying the required legal regulations for the establishment of a Diamond Bourse were recently completed, Güner also noted. 

“One of the biggest obstacles in front of the diamond trade - the special consumption tax on diamond at 20 percent – has been abolished. In addition, bourse members will not pay taxes for reciprocal transactions among themselves. In addition to such eases in the tax system, Turkey is also advantageous in terms of logistics. We have also started preparations for diamond cutting and processing. The Belgian, Israeli and Dubai bourses earn around $100 billion annually through the diamond trade. We aim to lure 10 percent of this volume to Turkey over the next two years, which will boost our exports significantly,” he said.