The Indian industry was in a damage control mode during the month of January 2014. To begin with, the synthetic diamond fiasco had to be sorted and remedial measures had to be adopted. And the problem had to be taken ‘by the horns’ and dealt with severity, as the credibility of the diamond industry was in stake. Also, the ripple effect will have far reaching consequences not only in the export business of loose diamonds and jewellery, but the flourishing domestic market would also be adversely affected. So, the Gems and Jewellery Export Promotion Council (GJEPC) of India, along with other gems and jewelry organizations pulled out all the stops to find solution/s for the problem faced by the industry.
Expert teams were sent to Surat’s diamond cutting and polishing sector to hunt and to find out the units manufacturing synthetic diamonds in a clandestine manner. The GJEPC also appointed experts - A T Kearney (global management consulting firm) and Bonas & Co. (De Beers brokers) - to assist in the project of establishing the current status, prepare a framework/guideline for the industry members. In addition, Winsome Diamonds, which has been in the spotlight for having defaulted in loan payments, was in further trouble with legal notices being served, causing great concern to the industry members who saw this as a ‘black mark’ on the whole Indian industry. Here again, the GJEPC had to go on an ‘image building exercise’ to spread the word around that the fundamentals of the Industry on the whole was strong and that such cases were isolated and do not reflect the health of the industry.
The diamond community was also concerned with the news of a sales executive of a leading Indian diamond company, who was murdered by some Armenian gang members in Dubai. The crime sent shock waves among Indian diamantaires in Mumbai and Surat, especially those having their operations in Dubai. Till now, Dubai was considered to be safer in comparison to Antwerp, which had witnessed a series of diamond heists in recent times.
With overseas markets improving and demand increasing, India’s polished diamond exports for the month is expected to show an increase as it was for the month of December 2013, when exports went up by 15.6 percent to $1,100.83 million against $952.17 million in December of 2012 according to GJEPC. In carat terms however, exports decreased to 18,740,000 carats in Dec. 2013 as against 20,390,000 carats during December 2012. Net polished exports during April-December 2013 registered a growth of 27.75 percent to $14.703 billion from a total of $11.509 billion during April - December 2012. This is a positive growth rate which the industry hopes to maintain as the European and SE markets showing improvement. The U.S. too has been encouraging during the past few months and with Valentine Day sales to look forward to, the industry hopes to have performed well in terms of loose polished stone as well as finished goods.
Again, demand for polished goods has been high from the domestic sector, given that the domestic market has been growing m-o-m with festivals as well as the wedding season resulting in excess demand.
Technological upgrading has been an ongoing process in the diamond industry. Sarin Technologies Ltd., the worldwide leader in the development, manufacturing, marketing and sale of precision technology products for the planning, processing, evaluation and measurement of diamonds and gems has successful culminated the Galaxy Ultra testing in Surat. The company will soon start supplying to the factories in Surat and elsewhere. Now, the CVD detection machine, too, has been sought after by companies. Kiran Gems, the world’s largest manufacturer of diamonds, has got its first CVD detection machine in its Mumbai office. The machine was bought to reinforce the trust of customers on Kiran and free them from any doubts that they might have on their products.
In the backdrop of rough supply shortage in the country, Indian Commerce and Industry Minister Anand Sharma met with his counterpart from Zimbabwe M. C. Bimha on the sidelines of the Partnership Summit 2014 in Bengaluru recently. This is expected to result in a two-way benefit for both the countries wherein Zimbabwe will supply rough diamonds to India; and Indian diamond companies will invest in Zambabwe by setting up cutting and polishing factories; and also open an institute/s to educate and train the local population in cutting and polishing diamonds.
De Beers’ January sight of $ 700 million was a disappointment mainly to the Indians as it increased prices by 5 percent on average across the board, hitting mostly the melee goods and the smalls which were raised by 7%. However, there was conflicting response in Mumbai towards the price hike. According to a sightholder, traders were not “too upset” by the price hikes as the rough diamond market had become buoyant in January with steady premiums on the secondary market.
Besides, there was good U.S. demand at the end of the year and as there was a fairly long gap between rough buying cycles in December and January, it has led to a depletion of rough inventory in the market. Another plus point is, as some receivables have come through from the fourth quarter, it has eased liquidity pressures too. As mentioned earlier, there was good demand for smaller, commercial-quality diamonds from USA to cater to consumers there who focused on discount shopping during the holiday season. Demand from China, too, followed the same trend for the Chinese New Year festival sales that began on January 31. As usual, though the Far East jewellery was driven by strong gold demand, demand for diamonds was seen from major jewellers who showed more interest in pushing diamond jewellery sales.
Still, some segments of the jewellery sector, especially the plain gold jewellery claim that 15% of the skilled workforce were laid off over the past few months. Even the diamond cutting sector claimed that in the past few months the industry has lost 80,000-90,000 skilled workers. While these figures are unconfirmed, the domestic market in general seems to be surviving.
Nevertheless, the Indian domestic market has been doing pretty well, despite the gold curb restrictions. In fact, the domestic diamond jewellery sector has found a footing with the tremendous demand for diamond jewellery across the country.
Across India, many Bridal Collections and Valentine Collections were launched during the month. MBJ launched the largest ever collection of Diamond Bridal Jewellery. KGK’s ‘Entice’ introduces charming gifts for ‘Valentine’s Day,’ Kirtilals launched bridal jewellery collection, while ‘Varuna D Jani’ boutique offered delightfully designed precious and rare jewellery.
In a surprise and straight from a film script, a youngster stole 18 kg gold and 12 kg of precious stones worth total Rs 22 crore from Tanishq showroom near Hyderabad in South India. He later approached a local TV station to surrender... so much for excitement.
There seems to be no stop to the showroom opening spree which continues unabated in the Indian domestic sector. The globally renowned jewellery retail chain, Joyalukkas further strengthened its presence in Mumbai with the launch of 2 new showrooms at Mulund and Vashi during the month of January, while PC Jewellers opened its 40th and 41st showrooms.
While trading in both polished and rough was quite active in the Mumbai diamond market, overseas buyers were seen in quite a number looking for goods.
The demand, supply pattern during the month of January, 2014 was as follows:
POLISHED: Rounds
0.005-0.15 cts, F-J / SI+, moving well; 1/5, H-J / VS, very good demand
1/4-3/8, selling well 1/4-3/4, D-J / SI+, moving fast but shortage of goods in the market
1/2-3/4, white / pique, moving well, shortage of goods reported
0.80-0.90 cts, selling well; F-J / VVS goods / less goods
1.00-3.00 cts, D-K / SI to pique, selling well, good demand, shortage of goods in market
1.00-3.00 cts, H-J / SI1+ fair demand for good makes
4.00+ cts, H-M / VS+ selling ok, but less goods
Fancy Cuts
Emeralds and Stabbes (wide baguettes), 0.25-1.00 cts, very good demand D-J / VS+, moving well.
Marquises 0.25-5.00 cts, F-J / VS+, moving well, good demand
Princesses, Pears and Emeralds, 2.00-5.00 cts, good demand for H-K / VS, moving well, fair demand
ROUGH:
Makeables: high demand; shortage of goods.
1-5 point: good demand: makeables. very good demand: OW TTLB & TTLC. Shortage of goods
6-20 point: good demand: crystals/makeables. Shortage reported
Fancies:
21-50 point: fancy shapes are in very good demand
0.51-1.00 carat: good demand: makeables; crystals.
1.01-2.00 carat: very good demand: rounds; crystals, all fancy shapes. Shortage of goods
2.01-3.00 carat: fair 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
