Rough Market Faces Its Toughest Year Yet

Image credit: Lucapa


(diamonds.net) - As the diamond market considers its options during the industry-wide lockdown, manufacturers in India are planning a freeze on rough imports. The move has precedent. Back in 2008, as financial markets collapsed, India imposed a one-month moratorium on rough buying. Ultimately, it helped the local trade realign inventory and gain market share while other manufacturing and trading centers tried to continue with business as usual. In a letter signed by various Indian trade bodies, the Gem & Jewellery Export Promotion Council (GJEPC) has called on all members to curtail rough imports for at least 30 days beginning on May 15. That would send a message to the banks that the industry was being careful not to raise its debt levels, and would also ease the financial strain placed on companies. All of this would lead to a “faster restoration of normalcy,” the letter read. With no rough coming in, manufacturers can focus on depleting existing inflated polished inventory, particularly since demand from China and Hong Kong is slowly starting to resurface. In the meantime, they are hoping to resume some polishing activity; manufacturers have a sufficient buildup of rough that they bought from December through March to fuel their factories.