With indications of the global economy progressing towards making a turnaround, the Indian diamond industry kept its production activity to a good level, anticipating good demand from overseas markets. The diamond district of Mumbai was abuzz with buyers from different countries, eager to close a deal before there is any appreciation of diamond prices. Still, buyers claimed that the asking price was high. By and large, there is a sign of the diamond market becoming strong as price corrections are taking effect. Diamond prices are expected to pick up during the year 2014.
Export business seems to have picked up during February, though exports for the month of January 2014 showed a decline, recording US$ 1,649.89 million, an indication of a slow phase after the overseas festival season of 2013. However, the industry’s cut and polished exports have recorded US$ 15,977.72 million for April 2013 to January 2014, registering a 21.06 percent rise from the previous year - a sign of better days during the rest of year 2014.
The domestic demand for polished stones was high during the month, considering that jewellery manufacturers and jewellery retailers were focusing on pushing diamond studded jewellery as against plain gold jewellery. Better quality caraters were in good demand, but shortage in goods was reported in the market. The gem and jewellery industry on the whole was more than active during the month of February in terms of production and preparation for the ‘Signature’ Show, which took place during the later part of the month. The Show revealed that the jewellery sections did very well in terms of footfalls as compared to loose stone section. No surprises there, as ‘Signature’ is looked upon more as a Jewellery Show focusing on design, rather than loose stones. Traffic, especially in the gold jewellery segment was high as in previous years, despite inflating prices of gold and fall in the rupee value.
On its part, The Gem & Jewellery Export Promotion Council (GJEPC) of India has taken all steps to strengthen the Indian G&J industry, which is facing a host of challenges at present.
It recently hosted the Trend Jewellery Forecasting Seminar in Mumbai. This initiative is GJEPC’s continuous effort to train and equip the Indian jewellery manufacturers with the latest in global trends and consumer preference. It also organized an awareness programme, supported by ASSOCHAM and the Controller General of Patents, Design and Trademarks, in Surat. In addition, as a remedy to the ‘synthetic stones mixing problem’ entering the natural diamond business, the Council instructed its members, through a circular, to certify the authenticity of diamond parcels as being of natural origin and untreated by declaring in each invoice/memo.
In another combined effort by GJEPC & Bharat Diamond Bourse (BDB) to solve the ‘synthetic diamond’ fiasco, a symposium was organised where De Beers promised to supply synthetic detection instruments like DiamondSure, DiamondView and DiamondPlus to GJEPC by the end of April 2014. Not to be left behind, The Gemological Institute of America (GIA) has also provided its latest invention, the ‘DiamondCheck’ machine, to the Bharat Diamond Bourse (BDB) on February 17, 2014. Some consolation here for the industry members as the stones can be checked before any transaction can take place.
As a corrective move to stop misuse of loop-holes in the export-import policy, the Development Commissioner's office of Surat banned import of gold, pearls and diamonds by Surat SEZ after the Union Commerce Ministry had revealed that SEZ units were involved in round-tripping and diverting the gems and jewellery to domestic market. If all the above steps taken by the industry leaders are implemented, the gem and jewellery industry of India can look forward to a more articulated future.
India is on a perennial shortage of rough diamonds and has to depend on sourcing rough diamond from overseas mining companies and the open market. But, though there is hardly any diamond mining activity within the country, some sections of people do not seem to be taking kindly to the Rio Tinto diamond mining project at Bunder in the State of Madhya Pradesh. While hundreds of villagers staged a protest some time ago, Rio Tinto claimed that since establishing a presence in Madhya Pradesh in 2004, Rio Tinto has been interacting with the communities to provide better access to health care information and resources. The sooner an amicable understanding is reached and the mining activity is allowed to proceed, it would augur well for the industry, according to market watchers.
The Indian government’s gold curb seems to have had a negative effect on the performances of jewellery companies. For instance, Titan Company Limited, the parent company of India's Tanishq brand, reported that sales of jewellery and watches, in addition to revenue from other business areas fell 11.3 percent year on year to $425.3 million for the third quarter that ended on December. Shrenuj & Company Ltd. reported that group sales fell 10.7 percent year on year to $205 million for the third quarter that ended on December 31. Diamond revenue dropped 10.4 percent to $173 million and studded jewellery sales declined 12.3 percent to $35.2 million. Gitanjali Gems too has reported a 70.6 percent decline in consolidated net profit at Rs. 50.46 crore for the third quarter that ended December 31, 2013. Tribhovandas Bhimji Zaveri Ltd. reported that its revenue fell 10.1 percent year on year to $83.3 million for the third quarter that ended on December 31. But as of now, hopes are high for the import duty on gold to be reduced in the ensuing Union Budget, as the GJEPC as well as the Gem & Jewellery Federation (GJF) have approached the government on this matter.
As in the past, many companies launched jewellery collections during the month offering jewellery for the ensuing Women’s Day. To mention a few, dedicated to the essence of Women’s Day, Tara Jewels launched a new line of fine jewellery narrating to the emotions of a woman through its designs. Also, a gold and diamond jewellery collection was recently launched by the Popley Group, an ode to the Woman of today and to celebrate Women’s Day.
In a welcome gesture, the Indian government took a proactive step recently to solve the ‘rough shortage’ problem faced by the industry. Commerce and industry Minister Anand Sharma’s meeting with the visiting Russian Deputy Prime Minster Dmitry Rogozin has given sufficient hope to the Indian industry, which is in dire need of regular ‘rough supply’ to feed its factories. Confidence seems to be returning to the cutting centres with the Indian government seeking a long-term deal with Russian diamond miner Alrosa, to ensure steady supply of rough diamonds for the country’s cutting and polishing industry.
Meanwhile, the demand, supply pattern during the month of Feb. 2014 was as follows:-
POLISHED: Rounds
0.005-0.15 cts, F-J / SI+, selling well; 1/5, H-J / VS, good demand.
1/4-3/8, moving well 1/4-3/4, D-J / SI+, shortage of goods reported.
1/2-3/4, white / pique, selling well, shortage of goods.
0.80-0.90 cts, selling well; F-J / VVS goods moving fast.
1.00-3.00 cts, D-K / SI to pique, selling well, shortage of goods in market.
1.00-3.00 cts, H-J / SI1+ v. good 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, good demand D-J / VS+, selling well.
Marquises 0.25-5.00 cts, F-J / VS+, selling well, good demand.
Princesses, Pears and Emeralds, 2.00-5.00 cts, good demand for H-K / VS, moving well, fair demand.
ROUGH:
Makeables: v. high demand; shortage of goods.
1-5 point: good demand: makeables, good demand: OW TTLB & TTLC. Shortage of goods.
6-20 point: good demand: crystals/makeables. Shortage in market.
Fancies:
21-50 point: fancy shapes are in good demand.
0.51-1.00 carat: good demand: makeables; crystals shortage in goods.
1.01-2.00 carat: very good demand: rounds; crystals, all fancy shapes.
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
