As the COVID-19 pandemic has hit the global diamond industry drastically, Moody's, the international rating agency forecasts that sales of polished diamonds from India, the largest manufacturing centre, to decline by as much as 30 per cent to $13 bn in the financial year ending March 2021.
According to Moody’s Report, the lockdown measures having badly hit all stages of the diamond value chain from rough diamond miners, through cutters and polishers to the jewelry end market, Moody’s said: "We forecast a 30 to 40 per cent fall in global revenue from rough diamond sales this year, a credit negative for major producers ALROSA and De Beers.”
Moody’s forecasts a recovery starting in the second half of 2020 as restrictions are eased. It sees global revenue from rough diamond grow by 20 to 25 per cent in 2021 registering about $10bn. However, it predicts that total production of rough diamonds will decrease by about the same proportion, down from 140 to 145 m carats in 2019 to between 100 and 110m carats in 2020.
The report said: "We estimate that since the recovery of rough diamond sales is likely to be gradual from June to July, global production in 2020 will still outweigh sales of about 90 to 95m carats by about 10 to 20m carats, which would result in an accumulation of diamonds, hurting producers' operating cash flows."
Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough & Polished
According to Moody’s Report, the lockdown measures having badly hit all stages of the diamond value chain from rough diamond miners, through cutters and polishers to the jewelry end market, Moody’s said: "We forecast a 30 to 40 per cent fall in global revenue from rough diamond sales this year, a credit negative for major producers ALROSA and De Beers.”
Moody’s forecasts a recovery starting in the second half of 2020 as restrictions are eased. It sees global revenue from rough diamond grow by 20 to 25 per cent in 2021 registering about $10bn. However, it predicts that total production of rough diamonds will decrease by about the same proportion, down from 140 to 145 m carats in 2019 to between 100 and 110m carats in 2020.
The report said: "We estimate that since the recovery of rough diamond sales is likely to be gradual from June to July, global production in 2020 will still outweigh sales of about 90 to 95m carats by about 10 to 20m carats, which would result in an accumulation of diamonds, hurting producers' operating cash flows."
Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough & Polished
