SAUDI ARABIA: Arab Spring economic hardships drive Mecca Gold sales down ahead of haj

Record ID: 189248

  • Title: SAUDI ARABIA: Arab Spring economic hardships drive Mecca Gold sales down ahead of haj
  • Date: 13th October 2013
  • Summary: MECCA, SAUDI ARABIA (OCTOBER 11, 2013) (REUTERS) VARIOUS OF PILGRIMS WALKING IN SHOPPING CENTRE/ JEWELLERY SHOPS PILGRIMS IN JEWELLERY SHOP LOOKING AT ITEMS MAN'S HANDS HANDLING JEWELLERY MORE OF PILGRIMS LOOKING AT JEWELLERY GOLD JEWELLERY ON DISPLAY SALESMEN TALKING TO CUSTOMERS VARIOUS OF GOLD BANGLES VIEW OF CUSTOMERS IN JEWELLERY SHOP SHOP SIGN TRADERS IN SHOP GOLD BRACELETS (SOUNDBITE) (Arabic) JALAL AL-AMIRI, MANAGER OF JEWELLERY SHOP, SAYING: "The sales were better in previous years, but this year demand is very weak, as you know, there are a lower number of pilgrims, and Arab pilgrims were affected by the Arab spring, so the market is weaker than past years. (Reporters asks: What about the prices?) The prices of gold are lower this year. The prices are reasonable but there is a small number of customers, in addition to the weaker demand. In general, people prefer to buy cheaper goods and accessories.'' VARIOUS OF PEOPLE IN JEWELLERY SHOP GOLD RINGS (SOUNDBITE) (Arabic) MOHAMMED AL-HIMMS, STORE MANAGER AT MS JEWELLERY, SAYING: ''The number of pilgrims is lower this year (compared to last year) because of the reduction in number of pilgrims from many countries, besides the unrest in some countries of communities who were used to buying but now they no longer exist, for instance, the Egyptians, they used to buy. But they don't buy like before. This is also one of the main reasons.'' VIEW OF GOLD JEWELLERY SETS (SOUNDBITE) (Arabic) MOHAMMED AL-HIMMS, STORE MANAGER AT MS JEWELLERY, SAYING: "The main reason is the construction work expanding the holy mosque grounds, it could be behind the decrease of the number of pilgrims, a decrease in the sales and the market was affected." VARIOUS OF PILGRIMS IN CLOTHES STORE MEN IN PERFUME SHOP PERFUMES ON DISPLAY VARIOUS OF PEOPLE IN CLOTHES STORE (SOUNDBITE) (Arabic) SAMIH, EGYPTIAN PILGRIM, SAYING: "The prices are suitable, there's this and that (cheap and expensive) They're (the prices) are ok, they're acceptable." EXTERIOR OF SHOP IN SHOPPING CENTRE
  • Embargoed: 28th October 2013 12:00
  • Keywords:
  • Location: Saudi Arabia
  • Country: Saudi Arabia
  • Topics: Business,General,Economy,Religion
  • Reuters ID: LVA4H5LIJ2H3NFKQL0F7THZH5WIQ
  • Story Text: Shopping centres in Mecca are bustling with pilgrims looking to buy gifts for their families, with visitors from Arab countries traditionally buying jewellery during the annual Muslim haj pilgrimage, often taking home necklaces, rings and bracelets to loved ones.
    But this year, shoppers say sales are slow, and people aren't buying as much of the precious metal as in previous years.
    "The sales were better in previous years, but this year demand is very weak, as you know, there are a lower number of pilgrims, and Arab pilgrims were affected by the Arab spring, so the market is weaker than past years,'' said Jalal al-Amiri, manager of a jewellery and gold shop, outside Mecca's Grand Mosque.
    Figures weren't immediately available on the value of gold sales, but traders say the haj season is traditionally the busiest for dozens of shops just outside the Grand Mosque, Islam's holiest site, whose windows glitter with bracelets, necklaces, rings, earrings, lockets and chains.
    Traders here say, gold prices are cheaper but it's failed to translate into retail sales.
    ''The prices of gold are lower this year. The prices are reasonable but there is a small number of customers, in addition to the weaker demand. In general, people prefer to buy cheaper goods and accessories,'' al-Amiri added.
    Some traders say it's the unrest in Arab countries that's impacting their sales figure, with less pilgrims travelling from Arab states to perform their haj.
    ''The number of pilgrims is lower this year (compared to last year) because of the reduction in number of pilgrims from many countries, besides the unrest in some countries of communities who were used to buying but now they no longer exist, for instance, the Egyptians, they used to buy. But they don't buy like before. This is also one of the main reasons,'' said Mohammed al-Himms, store manager at MS jewellery.
    Bullion prices in the Mecca retail markets this year are around 160 riyals ($43.8) per gram compared to around 200 riyals last year.
    On the world market, spot gold was down 1.5 percent at $1,266.80 on Friday (October 11), having earlier fallen as much as 1.8 percent to its lowest since July 10 at $1,262.14 an ounce.
    Traders also attributed the drop in sales to construction work to expand the holy mosque grounds.
    Pilgrims' lodgings have been moved from the market and barriers placed around some of the entrances making it difficult for visitors to reach the area.
    "The main reason is the construction work expanding the holy mosque grounds, it could be behind the decrease of the number of pilgrims, a decrease in the sales and the market was affected," added Aa-Himms.
    Saudi Arabia's religious authorities had also approved a request by the government to reduce the number of pilgrims to Mecca this year due to the Grand Mosque expansion work.
    The decision reduced the numbers from abroad by a fifth and from inside Saudi Arabia by half.
    But despite jewellery traders complaining of sluggish sales, some pilgrims said they're happy with what's on offer, and there seem to be items to cater for all budgets.
    Last year more than 3 million pilgrims travelled to Mecca for the pilgrimage, this year the numbers show a decline of around 1 million pilgrims.
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