Jewelry makers set up gold import company to fight the parallel market and lower prices

Economy of the East

Moroccan jewelers are preparing to launch a historic initiative in the gold sector by establishing a company specialized in importing the yellow metal, as part of efforts to fight the unregulated market and get out of the circle of dependence on unofficial intermediaries. This important step comes under the auspices of the Moroccan Federation of Jewelers and aims to solve a long-standing structural issue in the Moroccan market.

Idriss El Hazzaz, president of the Moroccan Federation of Goldsmiths, asserts that this stage is necessary to formalize the sector, which has been suffering for years from supply issues. Al-Hazzaz explains that the sector has been waiting for this moment for many years, as the real obstacle was the issue of advances imposed by the exchange office, but today the situation is finally favorable to move towards formalizing the sector.

The jewelry industry has been facing a shortage of raw materials for years, and the main reason for this shortage is the gap between the advances demanded by suppliers and those allowed by the Moroccan authorities. Foreign gold suppliers demand high down payments before any shipment, which is the norm in the industry, where financial safety margins are the norm.

In contrast, the exchange office regulates payment advances for reasons of fiscal prudence. Foreign suppliers require 80% to 90% as an advance before delivery, while the Moroccan framework traditionally only allows 20% as an advance. The informal market is thus imposing itself as an alternative solution, albeit with additional risks and costs.

This difference in thresholds costs jewelers and consumers dearly, as the vast majority of jewelers find themselves without direct access to the raw material and rely on intermediaries who find informal ways to obtain it. These channels impose their own tariffs, fuel scarcity, and generate additional costs that are always reflected in the price paid by the customer.

When the informal market dominates, one gram is sold at a much higher price than it should be, up to 100 dirhams above the international reference. It is an invisible tax that falls on the consumer and compensates for logistical and legal risks and intermediation rents. As long as direct importation remains impractical, this premium will not go away.

Rather than letting each one negotiate an impossible compromise on their own, the goldsmiths chose to group together in a unified import company. They decided to create a gold import company as the only way to exit the informal market and ensure a regular supply. The articles of association are currently being finalized, an expert accountant is accompanying the process, and a dialogue has been opened with the relevant authorities.

To pay the full or almost full amount of an invoice for which goods have not yet been received, a company must have a reference certificate that is only delivered after two years of activity. However, the Moroccan Goldsmiths Federation was promised an exceptional relaxation of this requirement by Customs.

In their case, after discussions with the parties involved, they got a promise from Customs to deliver their Certificate of Reference (CoR) before this deadline. In practice, they went from two years of formal activity to one year, and then, after persistence, to six months to obtain the full international reimbursement license.

On an economic level, the expected effects are clear. Supply will increase, informality will decrease, and price formation will become clearer. The sector has been waiting for this moment for years, and today the conditions are in place to move towards formalization. Goldsmiths hope for quick effects first on supply, which will become more regular, and on prices, which should approach the international market.

Several points remain to be decided. Will the company be for-profit? Will it add margins, albeit small, on purchase prices for subsequent resale to buyers? Obviously, there will be management fees, as when a jeweler imports, the process involves many expenses, but unlike the informal market, these should be limited to between 2% and 3%. However, unlike the unofficial market that charges an increase of approximately 10%, these fees should be kept between 2% and 3%.

In practice, if a kilo of gold is valued at 1 million dirhams, the fees will range from 20,000 to 30,000 dirhams per kilo. Importation is not open to all goldsmiths, but is reserved exclusively for shareholder partners. However, any jeweler who wishes to join the company is welcome to do so, he emphasized.

This initiative represents a paradigm shift in the Moroccan goldsmith sector, as it is expected to improve the quality of services and reduce costs for consumers, while at the same time enhancing market transparency and ensuring price stability in line with international standards.