The Rapaport Group, global manager of diamond data and international group of companies, has given a thumbs up to India, the world's largest importer of diamond roughs, according to www.mineweb.com. With the country's polished diamond exports rising 6% year-on-year to $2.04 billion in April 2011, the agency has forecast that India will overtake the United States and become the biggest consumer market for diamond jewellery over the next three years.
At a JCK Las Vegas show that opened June 5 and at the annual Rapaport conference hosted by Martin Rapaport, the chairman reportedly said: "There is no normal'', describing a world that is "as complicated as it's going to get,'' and one where the United States is no longer the top player in the diamond and jewellery industry.
He added that the explosive growth in China and India is driving diamond demand leading to higher prices. He made a similar statement while in India.
Reports have indicated that India is poised to overtake the USA and emerge as the world's second largest economy on purchasing power parity basis by 2050, and has the potential to overtake China to the top spot. Martin Rapaport, chairman of the Rapaport Group added to this, while on a visit to the country.
"Prices are driven by the consumer supply-demand dynamic in the consumer, and increasingly by dealer markets. India's net diamond account doubled from $1.67 billion last year to $3.37 billion. At this rate, India will overtake the US as a primary consumer market for diamonds within the next three years," said Rapaport, while addressing a small media gathering.
"India is incredible,'' he said adding that volumes play an increasingly significant role. And while the volumes in India have been constantly on the rise, in the US, change has been rather flat.
US weekly chain-store sales rose 2.5% for the week that ended June 4, 2011, according to the International Council of Shopping Centers and Goldman Sachs, but the week-to-week change has been flat. Michael Niemira, ICSC vice president concluded in a report that favourable weather in the US helped to increase the average spending per shopper, but foot traffic was down.
He has added that since June ranks as the second highest volume month of the year, it makes it a very important month for the fiscal quarter's performance.
In comparison, for the first four months of 2011, India's polished exports rose 39% to $11.21 billion, while polished imports grew 75% to $9.46 billion. However, net polished exports fell 34% to $1.75 billion. According to the Gems and Jewellery Export Promotion Council, exports are down 8% by volume to 4.945 million carats as the average price on the goods increased 15% to $411.57 per carat.
The Council data showed that rough imports rose 23% to $4.6 billion while rough exports increased a mind-boggling 56% to $465 million. Net rough imports grew 20% to $4.13 billion.
"A report by PricewaterhouseCoopers shows that India, which was at the fourth position in terms of purchasing power parity in 2009, will move to the second rank by 2050, after China. The US, will slip to the third spot by that period,'' said an analyst with a brokerage firm here.
Reports indicate that demand for diamond jewellery has shown a double-digit rise in line with the firm GDP growth. According to rating agency Crisil, the diamond jewellery market grew 25% in 2010. Further, both India and China accounted for around 20% of the global consumer demand in 2010 as against 12% in 2008.
India's net diamond account for January through April fell to a deficit of $2.38 billion, compared with a deficit of $781.3 million one year ago.
Rapaport Group has started to stake out the landscape though. Stating that both China and India have a reach along the diamond pipeline that the US could not emulate, Rapaport said that globalisation, technology and social networks have also created new realities and markets for new products.
The sheer size and scope of the local trade was evident with Rapaport launching its rupee price list in India. The Rupee price list will be a straight conversion of prices from dollars to rupee based on the Reserve Bank of India's exchange rate.
The list recognises the growing importance of India as the fastest growing consumer market for diamonds. "Thousands of Indian jewellers trade diamonds every day and they need price information that is easy to use,'' said an official. He added that the new rupee list will democratise diamond price information and increase consumer confidence "as it provides downstream access to standardised price information.''
Anticipating a glittering future for diamonds in India, the Rapaport group is also planning to launch a Renminbi price list for the Chinese market in the near future.
India currently has 62,000 ultra-high net worth households. Over the next five years, the number of such households is set to more than treble to 219,000, leading to a swell in purchasing power.
