Gem and jewellery exports are likely to fare worse than forecast earlier thanks to global economic conditions, weak worldwide consumption and higher raw material prices.
Vibul Hongsrichinda, president of the Thai Silver Exporters Association, said the shipments of gems and jewellery excluding gold could contract by 1% this year against an earlier-projection of 10% growth.
"Overall, the global economy is yet to recover, while terrorist attacks have battered global consumption," he said. "More importantly, the prices of key raw materials such as silver and gold have significantly increased."
For the first six months, according to Mr Vibul, the shipments of gems and jewellery excluding gold fell 1.3% to US$3.62 billion.
In a bid to stimulate sales, the International Trade Promotion Department is scheduled to host the 58th edition of the Bangkok Gems and Jewellery Fair from Sept 7-11.
The Thai Gem and Jewellery Traders Association had previously held the franchise to organise the event.
Malee Choklumlerd, director-general of the department, said 2,100 booths would be present at the event, which is expected to attract at least 30,000 visitors. More than 15 billion baht in transactions are forecast to be secured at the fair.
Participating entrepreneurs will be entitled to duty waivers on imported gems and jewellery to be exhibited and sold in the event.
"Over the next three years, the government aims to upgrade the quality of the fair to make it one of the top three in the world," said Ms Malee. "The government also aims to promote Thailand as a manufacturing and trading centre for the industry."
The Bangkok Gems and Jewellery Fair is ranked fifth among the world's gems and jewellery events, after Hong Kong, Italy, the United States, and Switzerland.
In order to stimulate the shipment of gems and jewellery this year and promote the industry, the government earlier this year approved tax incentives and vowed to continue developing gems and jewellery as one of the country's key export industries.
The cabinet on Feb 9 approved value-added tax waivers for unprocessed gemstone imports and a personal income tax exemption for individual traders who sell such gemstones.
The importation of gemstones is essential as domestic supplies cannot meet commercial and industrial demand.
There are 15,777 gem and jewellery entrepreneurs, 90% of whom are small and medium-sized enterprises, employing 1.3 million workers.