Surge in demand for gold rings sparks smuggling fears in Vietnam

TN News

Email Print

Demand for gold rings has been rising relentlessly as a result of the government's tight control over the production and and sale of bullion, sparking concern about smuggling to meet the demand.

Vietnam is the second largest consumer of the precious metal in Southeast Asia, according to Bloomberg, with people buying it for savings purposes.

But to reduce the impact of gold on the economy, the government has launched several measures including taking over gold imports and making the Saigon Jewelry Company (SJC) the country's sole bullion producer.

Earlier this year it tightened conditions for bullion trading, putting over 70 percent of 12,000 shops out of business.

Online newspaper VnExpress November 18 quoted an unnamed senior SJC executive as saying sales of rings at the firm had gone up since the start of the year while that of bars had fallen.

Jeweler PNJ reported 15-20 percent higher sales in November compared to last month.

Vu Minh Chau, general director of Hanoi-based Bao Tin Minh Chau, said rings weighing 7.5 and 11.25 grams -- or 20 and 30 percent of a tael -- are hot items.

Even heavier rings have been noticed in the market, and analysts said they obviously cannot be categorized as jewelry and jewelers are exploiting loopholes to boost sales.

A senior executive at a major gold trader, who asked for anonymity, said his firm has been making and selling plain gold rings for a long time, but now plans to package them in plastic to target investors.

Economist Vu Dinh Anh said the government's measures to control gold trading should also target plain rings, warning that ring production with little oversight would encourage smuggling.

Nguyen Duc Trung, another economist, pointed out that jewelers and buyers simply do not question the source as long as the gold is of good quality.

A senior official at the State Bank of Vietnam's Ho Chi Minh City office said government inspectors have busted many cases of gold smuggling in the Mekong Delta this year, especially in An Giang Province on the Cambodian border.

His office plans to keep a close watch on the jewelry market from June next year, when the Ministry of Science and Technology's Circular 22, which imposes certain conditions on jewelry, like size and weight, takes effect.

Like us on Facebook and scroll down to share your comment

More Business News