Gold traders are now considering the export market after experiencing sharp drops in domestic sales. Some of them see many barriers to taking the export route while others see it as an opportunity.
Domestic sales of gold accessories in Thailand has dropped by about 50% over the past 10 months due to high gold prices. Since the breakout of the US-led war against Iraq in February, international gold prices have increased by more than 60%.
According to Jitti Tangsithpakdi, the chairman of the Gold Traders' Association, Thai traders are not yet ready for the export business.
``They are not used to it,'' he said.
Since local traders had long enjoyed satisfactory sales from the domestic market, they never really thought of exporting, explained Mr Jitti, also president of Chin Hua Heng Goldsmith Co which has been exporting gold accessories for about two decades.
Gold accessories from Thailand are recognised internationally, but the lack of development over the past several years has put the country's gold industry at a disadvantage in the international gold market, Mr Jitti said.
Neighbouring countries that export gold, such as Malaysia, Indonesia, India and China, have already entered major gold markets, while Thai traders have just a tiny share, he added.
Thailand's gold industry is about five years behind its international competitors and of its total export volume, estimated to be two billion baht a year, a large portion is gold bars, not gold accessories, said the association's deputy secretary-general, Dr Kritcharat Hirunyasiri, also the managing director of Mae Thongsuk Gold Smith Co.
Other countries began using machines in their production process years ago. In Thailand, 99% of gold accessories are still handmade, putting the industry at a disadvantaged position in terms of productivity.
``When one of our goldsmiths finishes his third necklace of the day, one of their machines has already produced 100 necklaces,'' Dr Kritcharat said.
Another problem with handmade products is that the quality of all the pieces produced are not the same, while products made by machines are exactly alike, he said.
International customers expect gold accessories of the same design to have the same quality, both in terms of gold weight and pattern. The majority of Thai gold traders can not yet fulfill this need, Dr Kritcharat said.
To compete internationally, gold traders would have to improve the consistency of their product quality. Patterns of the accessories must be adjusted, so that they are more appealing to international customers, he said.
Traders, additionally, should use more machines in the production process, blending it with local goldsmiths' outstanding handicraft skills, he said.
Nevertheless, Prida Tiasuwan, chairman of Pranda Jewelry Plc, argued that handmade production is an asset _ not an obstacle.
Pranda Jewelry is exporting 99.9% gold accessories, under the brand Prima Gold, and jewellery to many countries, particularly in the Middle East. Its flagship Prima Gold accessories are mostly handmade.
``Many consumers are bored with machine-made jewellery. They are searching for something different. Our goldsmiths' outstanding skills have been passed on from generation to generation, and we should capitalise on it,'' Mr Prida said.
Besides the improvement in quality and design, Mr Jitti said the Thai gold industry is also in need of more hallmarking schemes, something to ensure international purchasers that gold products from Thailand meet international standards and their expectations.
He hailed the Consumer Protection Board for issuing a recent regulation stating that in all so-called ``pure gold'' accessories, at least 96.5% of the content must be pure gold.
Still more hallmarking schemes are needed to ensure the quality of gold products from Thailand, Mr Jitti said.
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