The Penang Goldsmith Association (PGA) is projecting the value of Malaysia’s gold jewellery exports to drop by more than 10% this year from RM4.8bil in 2015.
PGA adviser Joeson Khor told StarBiz that for the first four months of the year, the value of exported gold jewellery dropped by 12.4% to RM1.429bil from RM1.632bil.
Since the implementation of the goods and services tax (GST) a year ago, the small and medium-sized gold jewellery manufacturers and exporters have found it hard to give competitive credit terms to overseas buyers.
“Since GST, the small and medium-sized gold jewellery manufacturers and exporters have to spend between RM700,000 and RM1mil in goods and services tax (GST) to import the gold bars used to make the jewellery products.
“A small-sized company needs to spend between RM100,000 and RM200,000 to import the gold bars, which impacts the small and medium size gold manufacturers’ capability to export and stay competitive in the market, influencing the volume and value of gold jewellery products exported.
“About 80% of the gold jewellery products exported from Malaysia come from Penang-based gold jewellery manufacturers and exporters,” Khor said.
Khor added that the sales of the domestic gold retailers had declined by about 70% since the introduction of GST last year.
According to the latest Malaysia External Trade Development Corp report, the top buyers for the period from January to April 2016 were Hong Kong (RM44.4mil), the US (RM16.4mil), Australia (RM9.6mil), and Japan (RM8.2mil). “The exports to Hong Kong, US and Japan during the January to April 2016 period, however, declined by 21.2%, 21.9%, and 19.9% compared to the previous year,” Khor added.
The price of gold per ounce is presently about US$1,350, compared to US$1,119 per ounce in August 2015. Khor expects the price of gold to increase to around US$1,400 per ounce with the cost of producing an ounce at about US$1,100.
In the same period, Malaysia imported RM199.5mil worth of gold jewellery products, compared with RM299.8mil in the previous corresponding period.
Currently, only large gold jewellery manufacturers with RM25mil annual turnover are eligible to register with the Finance Ministry’s jewellery schemes permitting them to import gold bars.
Since April 1, gold jewellery manufacturers have to register for the Approved Jewellers Scheme, Approved Traders Scheme, or Approved Traders and Manufacturers Scheme to import gold bars.
The registration also allows the gold jewellery manufacturer to obtain a bank guarantee for the GST payment for the gold bars imported, and to claim back the 6% input tax payment.
Khor said more than 60% of the 650 PGA members were small and medium-sized companies with an annual turnover of less than RM25mil.
Source <> http://www.thestar.com.my/business/business-news/2016/07/18/gold-jewellery-exports-expected-to-drop-over-10/
PGA adviser Joeson Khor told StarBiz that for the first four months of the year, the value of exported gold jewellery dropped by 12.4% to RM1.429bil from RM1.632bil.
Since the implementation of the goods and services tax (GST) a year ago, the small and medium-sized gold jewellery manufacturers and exporters have found it hard to give competitive credit terms to overseas buyers.
“Since GST, the small and medium-sized gold jewellery manufacturers and exporters have to spend between RM700,000 and RM1mil in goods and services tax (GST) to import the gold bars used to make the jewellery products.
“A small-sized company needs to spend between RM100,000 and RM200,000 to import the gold bars, which impacts the small and medium size gold manufacturers’ capability to export and stay competitive in the market, influencing the volume and value of gold jewellery products exported.
“About 80% of the gold jewellery products exported from Malaysia come from Penang-based gold jewellery manufacturers and exporters,” Khor said.
Khor added that the sales of the domestic gold retailers had declined by about 70% since the introduction of GST last year.
According to the latest Malaysia External Trade Development Corp report, the top buyers for the period from January to April 2016 were Hong Kong (RM44.4mil), the US (RM16.4mil), Australia (RM9.6mil), and Japan (RM8.2mil). “The exports to Hong Kong, US and Japan during the January to April 2016 period, however, declined by 21.2%, 21.9%, and 19.9% compared to the previous year,” Khor added.
The price of gold per ounce is presently about US$1,350, compared to US$1,119 per ounce in August 2015. Khor expects the price of gold to increase to around US$1,400 per ounce with the cost of producing an ounce at about US$1,100.
In the same period, Malaysia imported RM199.5mil worth of gold jewellery products, compared with RM299.8mil in the previous corresponding period.
Currently, only large gold jewellery manufacturers with RM25mil annual turnover are eligible to register with the Finance Ministry’s jewellery schemes permitting them to import gold bars.
Since April 1, gold jewellery manufacturers have to register for the Approved Jewellers Scheme, Approved Traders Scheme, or Approved Traders and Manufacturers Scheme to import gold bars.
The registration also allows the gold jewellery manufacturer to obtain a bank guarantee for the GST payment for the gold bars imported, and to claim back the 6% input tax payment.
Khor said more than 60% of the 650 PGA members were small and medium-sized companies with an annual turnover of less than RM25mil.
Source <> http://www.thestar.com.my/business/business-news/2016/07/18/gold-jewellery-exports-expected-to-drop-over-10/