Reasons For JPPI To Remain Low

Jewelry prices at the supplier end as calculated by the Jewelry Producer Price Index remain very less for several reasons. Few of them are:

  • Retail jewelers have economized on re-ordering commodity (material). Hence, there is no solid demand, which means the highly disintegrated pipeline of suppliers will have no pricing power.
  • There is approximately large backlog of goods in the distribution pipeline which suppliers are intending to sell at almost any price, in an effort to increase cash.
  • Retail jewelers easily won’t accept high prices in the present recessionary environment.

Prices for both valuable metal jewelry and gemstone jewelry have diminished. Gold had been the fundamental driver of expensive metals inflation in 2007 and almost of 2008. In January 2009, gold prices reduced to reasonable limits, but have increased modestly after that. $900-$1,000 gold has been estimated into goods manufactured by jewelry manufacturers, so producer prices are not likely to increase extremely from current levels. The prices for valuable metals used in jewelry at the supplier (producer) end showed very small inflation.



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