KARACHI: Pakistani exporters and traders of gemstones and jewelry items on Thursday urged the government to adopt modern technological methods and remove restrictions to enhance exports from the South Asian country.
Pakistan’s Prime Minister Shehbaz Sharif last month urged authorities to upgrade the country’s gems and precious stones sector to industry status. According to a report by Pakistan’s Ministry of Commerce, the country’s exports of pearls and precious stones to China saw a 47 percent increase in 2023, showcasing the rising demand for Pakistani precious stones in China. Pakistan has huge reserves of emerald, ruby, sapphire, topaz, aquamarine and tourmaline gemstones.
Syed MinHajjuddin Shah, chairman of the All-Pakistan Commercial Exporters Association of Rough & Unpolished Precious and Semi Precious Stones, told Arab News that other countries were taking advantage in the exports of gemstones by adopting modern technological methods where Pakistan was losing out.
“China is big market for Pakistani gems but other countries, including Sri Lanka, are taking benefit,” Shah said. “Due to lack of modern mining technology our products get wasted during mining process.”
The total import and export value of China’s jewelry industry reached a record high of $145.334 billion in 2023, an increase of 8.62 percent on a year-on-year basis. Pakistan’s exports of gems and precious stones to China saw a 47 percent increase in 2023, indicating growing recognition of the quality of Pakistani gemstones among Chinese buyers, as per a Chinese media report.
Since 2023, the demand for colored gemstones in China has been steadily expanding, supplementing the traditional asset of gold. According to market research by the China Gems and Jade Association (Beijing) Fund Management Company, the average price increase for colored gemstones across all categories in China during the first half of 2023 ranged between 30 percent and 50 percent. Prices for larger or relatively rare gems surged by as much as 100 percent to 150 percent.
Shah said conventional blasting methods used in Pakistan to extract precious stones result in fracturing and cracking that reduce the quality and value of the gemstones. This, in turn, makes them less desirable for use in jewelry and other applications.
“Adoption of modern technology for mining can save a huge quantity of gemstones which will ultimately lead to value addition and higher foreign exchange earnings,” he said, Pakistan can also increase its exports to Gulf countries.
Adnan Qadri, the convener of a standing committee on gems and jewelry producers, manufacturers and exporters of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) told Arab News that last year, Pakistan’s gems exports experienced significant challenges and fluctuations.
He said this was due to Pakistan’s move to impose restrictions on the export of gems and jewelry to comply with the Financial Action Task Force’s (FATF) conditions aimed at curbing money laundering and terror financing.
“This led to a dramatic drop in exports, from $30 million to less than $10 million,” Qadri explained. He said the FPCCI has proposed measures to the government on how it can boost exports of gemstones from the country.
According to official data, the export of gems declined by 82 percent and 10 percent in terms of quantity and value during the current fiscal year. Pakistan exported 966 kilograms of gems worth $5.6 million during July-April period of the current fiscal year as compared to 5,436 kilograms worth $6.3 million exported during the same period last year.
The FPCCI, the apex representative body of Pakistani traders and industrials, has pointed out that restrictions on exporting precious gems and gold jewelry through courier services in Pakistan has led exporters to resort to misdeclare precious items as artificial jewelry, resulting in suppressed exports in the sector.
“Pakistan’s export policy hinders the growth potential of the gems and jewelry industry, which constitutes only a minimal fraction of the country’s total exports (0.04-0.05 percent of total exports),” the FPCCI noted in a budget proposal for upcoming budget for fiscal year, FY25.
Muhammad Zubair Motiwala, chief executive of the Trade Development Authority of Pakistan(TDAP) could not be reached for his comments on the export strategy.
