Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

Gold Makers, Merchants Association: Pricing Fees Increase Export Cost


Thu 09 Sep 2021 | 12:52 PM
walid Farouk

The total costs of exporting a gram of gold are about a US dollar, excluding fees of producing, as a result of imposing pricing fees on the export of gold items by the state.

The pricing fees constitute a burden on the exporting company.

Mostafa Saber, Managing Director and CEO of “Mr. Gold Egypt” for the manufacture of gold and jewelry, and head of the Association of Gold and Jewelry Makers and Merchants, said that Egyptian gold items enjoy competitive quality in foreign markets, and the state should remove obstacles for gold makers to open new markets, by canceling the pricing fees which are set at 1% per gram, as these fees raise the cost of exporting and prevent companies from offering competitive prices.

Saber added that companies do not export to retail stores, as they deal with wholesalers and distributors in foreign markets, which give them the opportunity to choose between the best products and the least manufacture fees.

He pointed out that exporting gold items brings hard currency to Egypt, increases job opportunities and contributes to reducing unemployment, in addition to boosting Egyptian industrial exports.

Saber pointed out that the state is making a great effort in restructuring and setting new policies to regulate the work of the gold and jewelry sector in Egypt.

He added, and the market needs the state's intervention in some issues, including addressing companies' change of policy in their commitment to citizens to recover the gold items without breaking glass stones, or what is known as stone scraps.

Saber explained that the companies gave up a large part of their profits, in order to activate sales, in light of the rise in gold prices to unprecedented levels, and gold manufacture fees are low compared to the past, as they represented 10% of the price of gold in the nineties.

However, now it represents 3% of the price of 21 karat gold, and 5% of the price of a gram of 18 karat gold.

He added that the volume of import of Italian gold items in the local market decreased by 30% after the local companies offered quality products that mimic imported products of 18 karat, as well as a decrease in their manufacturing fees.

It is worth noting that manufacturing fees of imported Italian gold items range between EGP 200 and EGP 250 pounds.

Saber pointed out that imported products of 18 karat are calculated at the price of 22 karat, as a result of foreign manufacturers charging the value of the product the "lowest" loss during manufacturing, as well as the cost of shipping.

He pointed out that the laser gold hallmarking and coding system, which Department the of Hallmarking and Scales seeks to implement during the coming period, will limit the manipulation of karats and introduce gold products that do not conform to legal specifications.

He went on say that the new system will enable customers to identify the data of the gold item from anywhere in the world, in terms of karat type, date of the stamp and the manufacturer, through an official portal and an application that will be launched by the Department of Hallmarking and Scales during the coming period.

He explained that citizens will accept to buy gold, even if the price of a gram becomes 10 thousand pounds, because they love gold by instinct, either for decoration or investment, and the Egyptians still consider gold as a tool for hedge and a safe haven.

Saber added that the local market witnessed a regression in the volume of sales during the Corona pandemic crisis, as a result of the partial economic closure that was imposed, and the closing of shops at five in the evening.

He continued, that the market movement is witnessing a state of improvement during the current year, and it is expected to continue, as a result of the presence of deferred purchasing desires associated with engagement and wedding parties.

He pointed out that gold bars and pounds have recently acquired a part of the market sales share, as a result of the high prices, and the desire of citizens to invest their money, as gold is one of the best savings vessels.

He added, that the culture of buying 21 karat gold spreads in the villages of Upper Egypt more than Cairo, as a result of the customs and traditions inherited from the love of gold, while citizens in cities accept 18 karat.

Translated by Ahmed Moamar