Thailand to become the world's gems trading centre

"Exports of gems and jewellery should keep surging following the government's supportive measures. Exports next year are expected to top US$9 billion from an expected $8.3 billion (Bt300 billion) this year," she said at the launch of the 44th Bangkok Gems and Jewellery Fair.

Gems and jewellery are the country's fourth largest export earner, hitting $5.68 billion in the first seven months of the year.

That represents sizzling growth of 25.4 per cent over the same period last year, but the main driver was gold, which accounts for 60 per cent of total exports of the category.

Excluding gold, exports of gem, jewellery and ornaments were down by 23.4 per cent to $2.1 billion in the period.

The gems show runs until Saturday at Impact Muang Thong Thani. About 30,000 overseas traders are expected to attend. This year's highlights are "variety gems", the introduction of the Diamond Pavilion and the announcement of the Queen's Cup Ploi Thai Jewellery Awards.

Vichai Assarasakorn, president of the Thai Gems and Jewellery Traders Association, said exports face a brighter future next year following positive signs for the economy.

"Consumers will have more purchasing power to buy luxuries and ornaments next year. However, only the sale of middle-market gems and jewellery and ornaments will grow gradually. Consumers will still be careful about spending a lot of money on high-end products as they're still worried about economic growth," he said.

The government's support measures include the waiver of the 7-per-cent value-added tax on imported materials for jewellery manufacturing, which is expected to go into effect next month, and the Gems Bank project, which will inject Bt3 billion in working capital loans into the industry.

Most manufacturers are SMEs that lack financial resources for business development, so the Gem Bank will effectively help SMEs to have enough liquidity to run their business, he said.

More than 90 per cent of the country's 10,000 gems and jewellery firms are SMEs.

He said the government must also continue its measures to support the industry's growth by waiving the VAT for diamonds and promoting Thailand as a trading centre rather than only a source of production.

Deputy Commerce Minister Alongkorn Ponlaboot said he would lead a mission to Kenya and Mozambique this week to search for sources of materials to support the gems and jewellery industry.

Kessiri Siripakorn, the commercial attaché in Washington DC, warned that the Kingdom's silver jewellery exports to the US were likely to lose their privileges under the US' generalised system of preferences next year if exporters do not urgently send backup information to the US.

Aphirak Paepuang, director of the Thai Trade Centre in Seoul, said the country's exports of gems and jewellery to South Korea are expected to increse considerably as the country showed signs of rapid recovery.