The Indian diamond market was quite active during the month of July, considering it is a slow period up to September, after which overseas demand will hopefully pick up. Currently, the market is stable, but the diminishing demand from overseas consuming markets seems to be of concern to the Indian exporters. The USA, as always, is the sustenance besides the Indian domestic market with its continuous demand for polished stones of all quality, size and shape. However, demand from the domestic market was rather slow as July-Aug is a period when jewellery sales are lowest; and normally pick up when festivals begin by September.
Manufacturing centres are working at a positive pace, with limited roughs in the pipeline, but still at a pace to be ready with goods for the IIJS 2015. Market corrections taking place with existing polished goods are being traded in an attempt to reduce the large inventory in the market. Hopefully, price corrections in rough and polished stones will eventually take place with the market becoming more stable. Good demand for caraters was reported while demand remains weak for stars and melees from the overseas markets. Demand from the domestic market was good, but the IIJS is expected to buck things up. With gold prices slipping down by the day, gold jewellery suppliers are looking forward to the show, expecting it to boost demand.
During the month, India’s cut and polished exports for June ’15 was announced by the Gem & Jewellery Export Promotion Council (GJEPC) of India, which showed a decline of 2.22 percent recording $1853.99 million as against $1896.01 million in June ’14. Rough imports recorded $1509.22 million for June ’15 as against $1609.71 million in June’14, registering a decline of 10.73 percent. Not a pretty picture, but the Indian industry performance is a reflection of the global slowdown.
The month of July saw the Indian industry preparing (having started months ahead) for the annual Events India International Jewellery Show (IIJS) & India International Jewellery Week (IIJW).
To discuss the current market scenario and issues faced by the diamond industry a meeting was convened by the Gem & Jewellery Export Promotion (GJEPC), Bharat Diamond Bourse (BDB) & Mumbai Diamond Manufacturers Association (MDMA) during the first week of July. All the three associations and members present unanimously agreed that the market has been going through tough times and there is a need to take short-term, as well as long-term measures to address the issues faced by the industry. During the meeting, the traders reviewed the market situation and unanimously decided to defer the option of voluntary closure or embargo on rough import for the time being; and instead encouraged upon self-discipline by the traders in import and purchase of rough diamonds based on their inventory and demand for polished diamonds. A step that the Indian industry is expected to follow religiously, if it wants to get out of the current situation.
The current slowdown has even affected the The Surat Diamond Bourse (SDB) project, which has been stalled. SDB committee spokesman, Mathur Savani, said, "The diamond industry is not in a healthy state at this point of time. We can't hope to get the token amount for booking office space. The project is likely to be delayed further. We will have to wait for the market conditions to get better”
Diamond financing bank, The IndusInd Bank completed acquisition of Royal Bank of Scotland's (RBS) diamond and jewellery financing business in the India during the month, giving hopes for the Indian industry for some extra relief.
While the industry reports slowdown, it is business as usual for some companies. Indian company, Rajesh Exports Limited (REL), through its wholly owned subsidiary in Singapore has fully acquired European Gold Refineries, the 100% holding company of Valcambi, in an all cash deal with a total investment of USD 400 million. Valcambi is the world’s largest precious metals refining company headquartered at Switzerland. Rajesh Mehta, Chairman, Rajesh Exports Limited said, “This is a historic moment for REL and for the global gold business. The coming together of REL and Valcambi would expand the global gold business and would prove very productive for the future global plans of REL group”. Slowdown? What slowdown?
It was a shot in the arm for the industry when the Central Board of Excise and Customs (CBEC), Government of India, issued a notification granting duty exemption on cut & polished diamonds that are imported for the purposes of ‘grading or certification and re-export out of India’ to the three laboratories Gemological Institute of America (Mumbai), Indian Diamond Institute (Surat) and the International Institute of Diamond Grading and Research India (Surat).
Technology is always welcome in the industry... M. Suresh Company Private Limited., a leading diamond manufacturer, importer and exporter of cut and polished diamonds recently announced a the launch of its newly designed B2B diamond trading web portal, www.msureshco.diamonds. The new web portal has an enviable inventory of diamonds. Commenting on the launch Manish Pethani, Director of the company said, “Today, everyone wants business to be a click away and our new trading portal is exactly what diamond buyers are looking for. Its hassle free registration, user-friendly navigation makes it perfect for always-on-the-move diamond buyers.”
And so do efforts to be more transparent in business... Kirtilals, India’s premium diamond and gold jewellery brand, has created a ‘Solitaire Lab’, and installed a Diamond Analyzer Machine exclusively at their showroom in Chennai, a city in South India. The Solitaire lab at Kirtilals is an exclusive platform created to allow consumers to walk in with their diamonds and test the quality of the diamond. This initiative is taken by Kirtilals to educate the end customer on the various diamonds that are today available in the market and how to choose the right diamond that makes it a valuable investment for the future.
The sign that diamond jewellery has really made a mark pan India is the changes taking place at Kalyan Jewellers, the leading jewellery chain in the country. It announced that it would transform its 145 'My Kalyan' customer service outlets across the southern state Tamil Nadu into mini Diamond Stores, offering diamond jewellery ranging from Rs 5,000 to Rs 25,000. T. S. Kalyanaraman, chairman and managing director, Kalyan Jewellers commented that the mini diamond stores will create awareness and accessibility for consumers to avail of Kalyan's intricate and finely crafted diamond jewellery. "The transformation of 'My Kalyan' stores to mini diamond stores will make us one of the largest diamond chains in Tamil Nadu," he said.
It’s free falling where gold prices are concerned in India. While sales seems to rise in the domestic markets and exports increasing too, the fall has wiped out 44% of the value of gold reserves with the Reserve Bank of India (RBI) compared with the peak levels in 2011. The RBI currently has 557.75 metric tonnes gold in its reserves. But technically, the slide in value should not be a major worry for the central bank if one takes a long-term view. Over the years, the RBI’s gold reserve value has appreciated multi-fold when the yellow metal had a long period of bull-run. In that sense, the drop in the gold value is notional.
The month also witnessed, a novel step undertaken by the Gem & Jewellery Skill Council of India (GJSCI), under the National Skill Development Corporation (NSDC) introduced the new digital learning platform, to skill and up skill Jewellery Retail Sales Associates (JRSA) across India. This initiative will help individuals at remote locations get trained by themselves, along with their work, at a time of their convenience.
Aruna Gaitonde, Editor in Chief of Asian Bureau, Rough & Polished
