Egypt Increases Gold Jewelry Processing Fees by 10%

A group of Egyptian gold jewelry manufacturing companies have raised processing costs, starting in early September.

Eid Youssef, head of Gold Division at the Federation of Chambers of Commerce in Menoufia, stated that some local companies have informed gold traders and stores that the manufacturing costs for all their products have increased by approximately 10 EGP.

He added that the increase in manufacturing fees ranges between 8% and 10%, but this percentage does not correspond with the recent rise in production costs due to inflation and the overall increase in prices, including the costs of energy, fuel, and wages.

Youssef noted that the rising price of gold naturally leads to higher manufacturing costs due to the wastage percentage during production. The manufacturing fees are calculated based on several factors, including the amount of gold lost during production, production costs, and the profit margins of manufacturers and traders.

He further explained that the wastage during production is factored into the manufacturing cost, with the wastage rate ranging from 3 to 5 grams per kilogram depending on the type of product being manufactured. As a result, rising gold prices contribute to higher manufacturing costs.

Youssef also mentioned that gold jewelry manufacturers have reduced their profit margins to continue operating amidst significant economic challenges facing both the local and global markets.

He concluded by pointing out that gold prices in local markets have risen by approximately 7% since the beginning of the year, while gold prices on the global market have surged by 21%, surpassing $2,500 per ounce.