The polished diamond market was fairly good, with trading activity picking up sharply due to the Indian Festival Akshay Tirtiya falling in the first week of May 2014. Demand for all shapes, size and quality of polished stones increased during the month. Manufacturing activity was also brisk both in loose diamonds, as well as finished goods, as the Akshay Tirtiya is a festival when jewellery is bought as a traditional ritual. So, with high demand for polished stones from the domestic market, the gem and jewellery industry was able to keep afloat, with a slowdown from other overseas markets. Still, there was evidence of the US market picking up and other economies, too, showing a sign of recovery during the month.
Export demand for polished goods was considerably good despite it being a slow month. Polished prices show signs of stabilizing, a step to a stronger market. For March 2014, the export of cut and polished diamonds at US$ 1,571.44 million registered a decline of 33.11% as compared to US$ 2,349.42 million for the same period of the previous year. Imports of cut and polished diamonds at US$ 789.11 million in the month of March 2014 also showed a decline of 30.06% as compared to US$ 1,128.29 million for the same period of the previous year.
The ‘rough market’ was slow as the price hike by De Beers put a brake on the trading activity. Also, the cash crunch in the market did not help in boosting the trade in any way. The scarce liquidity to finance rough purchases was a big problem and for Sightholders, who were left holding the goods due to want of buyers, stretching credit terms was the only way out to sell their goods. Though ALROSA left its price unchanged, fair trading activity was reported in Russian goods, though margins were minimal.
The domestic market, at the retail level, was quite brisk and retailers seem to look forward for the Akshay Tirtiya sales that promise to be better this year. While jewellery manufacturers have been busy with special jewellery for the festival, retailers have put in all their efforts to focus on promotional activities for the collections they offer for Akshay Tirtiya. Jewellers are reportedly going all out to woo would-be buyers. If some are offering a free pick-up-and-drop, others are slashing rates on ‘making charge’ or giving a flat discount on purchases.
That diamond financing banks have been tight-fisted is rather an old story. But media reports attributed the problem to rough prices. It was said that the Indian diamond industry worth $28 billion was heading towards a stormy phase because banks were drastically cutting on lending. This could be partially correct as the prices of rough diamonds were rising too fast, while there was little upward movement in the prices of polished diamonds.
Good cheer spread in the Indian gem and jewellery industry when India’s Gem & Jewellery Export Promotion Council (GJEPC) and state-owned Russian diamond mining company ALROSA signed a memorandum of understanding (MoU) on 10th April 2014, in Moscow. Considered a milestone, the MoU, inked by GJEPC Chairman Vipul Shah and ALROSA President Fyodor Andreev, is an indication of the warm trade relations and the increasing trade between the two countries. Though it is stated that most of the rough diamonds produced in Russia are cut and polished in India, India looks forward for more direct imports of rough diamonds from Russia to India. With the fiscal 2013 figure standing at just $767 million, Indian diamantaires indicate that they can absorb more of ALROSA’s roughs as direct imports.
India was a winner when De Beers announced its list of ‘Sightholders’ for 2014-15. The four new Indian ‘Sightholders’ added to the list were Star Rays, Vallabhbhai Danjibhai & Co, J.B & Brothers and D. Navinchandra Gems. All these new Sightholders had been participating in the online auctions of roughs conducted by De Beers’ group company Diamdel, which sells around a 10th of the total output.
The need for a continuous supply of ‘rough’ in the Indian manufacturing sector can be gauged by the buying pattern of Indian diamantaires. At the first tender sales organized by the Dubai Diamond Exchange (DDE) and facilitated by Global Diamond Tenders in cooperation with the Dubai Multi-Commodities Centre (DMCC) in Dubai recently, the Indian buyers purchased almost all the Zimbabwean ‘rough’.
In another ‘good news’ that brought relief to the Indian diamond sector was the step taken by the Reserve Bank of India (RBI) in liberalizing the norms for rough diamond imports by completely lifting restrictions on the number of diamond mines to which advance remittances can be extended for roughs imports. Now, Indian importers can buy their rough stones from any mining company in the world without any restrictions, which augurs well for the industry on the whole.
The recent announcement made by the Gem & Jewellery Export Promotion Council (GJEPC) of India, in regards to the annual performance for the Indian gem and jewellery sector for the FY2013-14, was received with mixed feelings by the industry players. While the diamond industry shows fairly good export performance, the overall figures of the gem and jewellery industry is not very encouraging, showing a decline of 11% in comparison to the last year. The industry has declared a contribution of US$ 34,746.90 million to India's foreign exchange earnings. The dip is attributed to the stringent gold import policy, as exports of jewellery, especially gold, is dismally down by 39.50%.
However, the bullish Indian marketers are going all out in the growing US market and with Europe markets also improving, the Indian industry is on the lookout for other growing markets such as the Middle East, Russia, China and also some emerging markets to enter.
In addition to its many initiatives, the GJEPC has decided to make the Global Gems & Jewellery Fair (GGJF), which concluded in Dubai recently, a regular annual event. The 3-day Jewellery Fair was organised by the GJEPC and the Dubai Multi-Commodities Centre (DMCC) for the first time this year.
More than 130 exhibitors from across India participated in GGJF- the premier 'by-invitation' only international trade fair, which attracted over 600 sel ect buyers from across the globe.
When the Rio Tinto mining project in India is facing hurdles, the information that twenty leading Indian jewellery companies fr om Northern and East India made a historical first visit to Rio Tinto’s Argyle Diamond Mine in the remote east Kimberley region of Western Australia, made some positive news. This could well turn out to be a lasting partnership between Rio Tinto’s diamond business and the Indian diamond industry, which spans the entire diamond jewellery supply chain.
The demand/supply situation during the month of April 2014 was as follows:
POLISHED: Rounds
0.005-0.15 cts, F-J / SI+, moving well;
1/5, H-J / VS, good demand, selling very well, shortage of goods reported
1/4-3/8, selling well 1/4-3/4, D-J / SI+, selling very well, less goods
1/2-3/4, white / pique, selling well, shortage of goods
0.80-0.90 cts, selling well; F-J / VVS goods / shortage of goods
1.00-3.00 cts, D-K / SI to pique, moving well, good demand, goods were not available
1.00-3.00 cts, H-J / SI1+ good demand for good makes
4.00+ cts, H-M / VS+ moving well, but less goods
Fancy Cuts
Emeralds and Stabbes (wide baguettes), 0.25-1.00 cts, good demand D-J / VS+, moving well.
Marquises 0.25-5.00 cts, F-J / VS+, good demand, selling well.
Princesses, Pears and Emeralds, 2.00-5.00 cts, good demand for H-K / VS, selling well, very good demand
ROUGH:
Makeables: very good demand; shortage of goods.
1-5 point: fair demand: makeables; very good demand for OW TTLB & TTLC. Shortage of goods
6-20 point: very good demand: crystals/makeables, shortage reported
Fancies:
21-50 point: very good demand, less goods
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
5.00 carat+: fair demand for $1,000+ makeables, crystals & all fancy shapes
Mixed lot: very good demand
Aruna Gaitonde, Rough&Polished, India
