As the Indian diamond industry closed for its annual Diwali holidays, diamantaires look forward with hope that post Diwali, they will see better days. The probable 5% hike in import duty on cut and polished diamonds may augur well for the industry on the whole. More so for the cutting and polishing sector that is adversely affected due to rough shortage, Rupee weakening and liquidity issues. In addition, with the lifting of the EU sanctions on Zimbabwe, Surat is expected to be flooded with sufficient roughs thereby solving the shortage problem. And, as Diwali is a festival which brings in good tides and new beginnings, it augurs well for Surat, which apparently is the only centre in the world which can process the Zimbabwe diamonds.
During the month of October, the diamond market in Mumbai was quite active due to the on-coming festive season locally as well as the Christmas, New Year and Valentine Day festivities demand from overseas. Many overseas buyers, it is told, were in the market looking for polished goods. However, the market’s liquidity situation was tight during October, like in the previous months. Again, asking prices were more, leading to price haggling and delayed deal closures.
Rough trading in Mumbai was subdued during the month, due to the high prices of rough. People were not interested to buy rough diamonds as there was no profit in manufacturing. The majority of manufacturers felt that there should be a correction either in rough prices from mining companies or the polished buyers need to improve their offers. This tight situation has had many a small and medium manufacturers in Surat planning to delay re-opening factories. But, as of now, most of the units are optimistic about the future as they look forward for the cheaper Zimbabwe roughs coming into Surat.
The demand for polished stones of all size, cut and quality was high in anticipation of good sales of diamond jewellery during Diwali this year. Almost all well-known jewellers, worth his salt, have made arrangements to launch new collections for Diwali. The local media’s coverage has prospective buyers agog with the numerous new collections, schemes, etc. for the coming festival, with jewellers vying for eye-balls in the publicity arena. There seems to be a mood amongst some small and medium manufacturers in Surat to delay re-opening factories until after they have reviewed the situation at the end of November taking into account the November Sight.
The Indian diamond market condition remains unchanged from the previous month. Liquidity problems continued and the stricter lending norms of the major banks did nothing to ease the situation. Lack of profitability in manufacturing continued to be biggest problem. Polished demand was steady but prices have softened over the last many months. The industry now looks towards the US demand, which is expected to be high for the festival sales. The stabilisation of the Rupee has brought back confidence into the Indian domestic market. Of course, profit margin remains the major issue.
A few unexpected happenings did stir the diamond market during the month. The Income Tax (IT) Department raided about 100 locations across four major diamond trading hubs – Kolkata, Jaipur, Mumbai and Surat. The IT officials however stated that the raids were conducted only on bogus traders. The raids were targeted mainly on small businessmen who made fake invoices and bogus bills and not diamond traders. After the initial shock, this information brought a sigh of relief to the industry members. In another new, there was a robbery case which shook the market, as these events were unheard of in the olden days. But, as the industry is growing bigger and with competition becoming fierce, such events are expected and the industry is slowly learning to accept.
Almost all major retailers in India have launched new collections for Diwali. Some like Tara Jewellers, besides launching Diwali Collections, have joined forces with cancer foundation Tara created a white and pink sapphire hair clip, wherein 20 percent of the proceeds from its sale will be donated to the Ogaan Cancer Foundation. Some jewellers however feel the festive mood is rather slow this year for jewellery sales, and are trying to woo customers with gifts and promotions.
In the previous month polished diamond exports from India stood at $1.684 billion, rising 11 percent on y-o-y basis, but fell 1 percent in volume terms to 3.023 million carats, as per reports. The imports of polished diamonds were worth $606 million, which is more than double of September 2012. The country’s net polished exports dropped 13 percent to $1.078 billion, reports say. Imports of rough diamonds in September slipped 6 percent to $1.282 billion and exports of rough diamonds dropped 22 percent to $124 million.
Following the DTC Sight, which ended on October 4, Indian Sightholders (SHs) were reportedly a frustrated lot. As there remains little profitability or liquidity on the rough market, the Sight which had an estimated value of $570 million did not excite SHs. It is reported that an estimated 15 percent of goods, or $86 million worth, had no takers. Sightholders rejected about 20 percent of goods at the previous two Sights. So, trading in the secondary market remained quiet throughout the third quarter. The Indian SHs, though a little concerned, look forward to the commencement of the “new era” in Gaborone from November
In India, the question of synthetics is being looked at very seriously like elsewhere in the world.
During the Month of October 2013, the demand and supply situation was as follows:-
POLISHED: Rounds
0.005-0.15 cts, F-J / SI+, good demand, moving well
1/4-3/8, good demand
1/4-3/4, D-J / SI+, good demand. Shortage of goods
1/2-3/4, white / pique, selling well
0.80-0.90 cts, selling well; F-J / VVS selling very well; shortage of good
1.00-3.00 cts, D-K / SI to pique, v. good demand, less goods in market
1.00-3.00 cts, H-J / SI1+ very strong demand for good makes
4.00+ cts, H-M / VS+ good movement, shortage of goods in market
Fancy Cuts
Stabbes (wide baguettes), 0.25-1.00 cts, fair demand D-J / VS+, selling well.
Marquises 0.25-5.00 cts, F-J / VS+, good demand
Princesses, Pears 2.00-5.00 cts, good demand, no goods available
ROUGH:
Makeables: very high demand; shortage of goods.
1-5 point: very good demand: makeables, fair demand: OW TTLB & TTLC.
6-20 point: good demand: crystals/makeables. Goods Shortage
Fancies:
21-50 point: fancy shapes good demand but goods not available
0.51-1.00 carat: v.good demand: makeables; crystals.
1.01-2.00 carat: good demand: rounds; crystals, all fancy shapes. Goods not available
2.01-3.00 carat: high demand, shortage of goods
5.00 carat+: fair demand: $1,000+ makeables, crystals & all fancy shapes
Mixed Lot: very good demand
Aruna Gaitonde, Rough&Polished, Mumbai
