Import of rough diamonds fell 15.54% in the first 10 months of this financial year, according to the Gem & Jewellery Export Promotion Council (GJEPC).
Industry executives anticipate a further fall of 10-15% in February and March, as manufacturers are not keen to build up inventory in the wake of coronavirus outbreak which has affected demand in the major markets of Hong Kong, mainland China and the Far East.
Meanwhile, Russia’s diamond miner Alrosa has granted flexibility
to India’s authorised bulk purchasers of rough diamonds to buy 55% of the contracted volume so that their inventory does not pile up. “The US-China trade war has impacted exports, which in turn has brought down imports of rough diamonds.
Slow demand in the world market has resulted in piling up inventories in FY20,” Colin Shah, vice-chairman, GJEPC, told ET. “Manufacturers wanted to clear their inventories first, before fres ..
fresh stocking. During the Christmas and New Year, there was good demand from the US and Europe and we were able to offload quite a substantial portion of our inventories.”
International agency Rapaport said in its recent report that the recent influx of rough diamonds in the market, coupled with the weakened outlook for China, had raised concerns that the trade would return to an oversupply of rough diamonds.
De Beers reported a 9% year-on-year increase in sales to $545
million in January, owing to firmer prices on select boxes of commercial-quality diamonds.
It said that mining companies were holding large quantities of rough diamonds which they could not sell in 2019. Production of rough diamonds is projected to decrease about 6% this year, although mining companies have enough inventory to offset the decline.