High Prices Dull the Shine of Old Dhaka's Gold Bazaar

by Thilaka Ravi on  January 7, 2010 at 3:08 PM Lifestyle News
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Every morning, before Dhaka's goldsmiths open their shops in the city's historic Tanti bazaar, Shahabuddin climbs into the sewers under the alleyways to pan for scraps of discarded gold.

When bullion began its record-breaking rally in 2008, the tiny specks of gold that Shahabuddin fished from the sludge earned him up to 1000 taka (14 dollars) a day -- a fortune in Bangladesh, where the average wage is 25 dollars a month.

"Initially everyone was happy with gold prices rising as it brought better returns," he said.

But when gold hit a record above 1,226 dollars an ounce early last month, Shahabuddin, 45, and the 20,000 goldsmiths at the Tanti Bazaar saw the other side of the commodities boom.

"Because of sky-high prices most people have stopped buying gold ornaments even for weddings. Marriage season has begun, but most goldsmiths are sitting idle," Shahabuddin said.

There are around 400 gold shops and factories at the bazaar, most of which have been run by Hindu goldsmiths since the market was founded in the 18th century.

Usually, the bazaar's narrow alleys swarm with customers as the artisans work night and day during the winter wedding season and at major Muslim festivals such as Eid al-Fitr.

But this year the market is quieter.

"If the goldsmiths don't have any work, we don't have anything to collect," Shahabuddin said, adding that he now finds only 100 to 200 taka of gold scraps a day and thinks searching through human excrement "too foul" for such meagre rewards.

Gold prices have dropped slightly from their peak in December but at around 1,100 US dollars an ounce this week -- around 250 dollars higher than a year ago -- they are still too high for many of Bangladesh's normal buyers.

"The middle class has simply stopped buying gold ornaments for weddings. Even the rich no longer buys gold for gifts," said Ganga Charan Malakar, owner of the country's biggest chain of gold shops, Venus Jewellers.

Bangladeshi traditions require a groom to give a full set of gold ornaments to his bride as a wedding present. The ornaments normally weigh between 40 and 200 grams, depending on how wealthy the groom and his family are.

Malakar, who started his career as a goldsmith in Tanti Bazaar in the 1960s, said jewellery sales have fallen over 50 percent in the last year, forcing hundreds of artisans to close their shops or run their business at a loss.

"When bullion prices began to increase, we were happy because we could sell our stock with better returns. But now there is no sign that prices are coming down to an affordable level," he said.

"Look at my shop: it is empty. During this season in the past, we used to hire extra salesmen to handle clients. I've never seen anything like this in my life," he said.

Malakar, who is the president of the 25,000-member Bangladesh Goldmiths Association, said that over the last year, the small jewellery factories at Tanti Bazaar had slashed many jobs.

"My factories used to employ over 2,500 workers during the winter. But this year we have only about 1,000 workers. Many of the factories which would do contract work for other jewellers have folded due to lack of orders," he said.

Paran Chandra Sarker, 28, started his career as a apprentice goldsmith 12 years ago when "it was one the best career choices for a poor, uneducated Bangladeshi Hindu man."

At Tanti Bazaar, thousands of goldsmiths like Paran work in tiny, dingy workshops. They mould gold into necklaces, earrings, tiaras, bracelets, rings and chains using only sulfuric acid, blowpipes and practised skill.

At night, they sleep in their workshops -- Paran and 16 others live in one room, in which they can only lie down when they have carefully stacked their small work benches and bottles of acid into one corner.

When business was booming, Paran, now a top goldsmith at Preeti Jewellery workshop at Tanti Bazar, would earn up to 40,000 taka a month.

"All the Hindu parents used to want to marry their daughter to me," he said wistfully, explaining that he now fears it will be much harder for him to find a wife.

In the past six months, he struggled to make half that amount as demand for jewellery -- and his craftwork -- has dried up.

"Now I toil until 03:00 am for just 15,000 taka a month. A lot of my friends have left the trade or gone to India," he said.

At the Tanti Bazaar today, the only businesses that are thriving are the pawn shops, as people hard hit by the impact of the global recession come to mortgage their beloved jewels for some much needed cash.

"Business is not bad at the moment," said Kartick Roy Poddar, 63, the owner of the country's largest pawn shop, with a wry smile.

When he started the Adi Kartick Roy Poddar Pawnshop four decades ago there were only a few pawnshops in Tanti Bazaar, but now they are everywhere.

According to the bazaar's Gold Merchants Association, the number has nearly doubled over the past five years.

"Tanti Bazaar will soon be known for only the pawn business, not for gold jewellery anymore," he said.

Source: AFP

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