The diamond industry is expected to recover at a haphazard and slow pace until November or December this year following the Covid-19 pandemic, an analyst has said.
The diamond industry was also experiencing poor demand, weak prices and credit constraints prior to the global Covid-19 pandemic.
Industry analyst Edahn Golan told a webinar last week that cashflow is currently slow, while the ability to pay employees is limited.
“The entire diamond industry rests on the shoulders of retail and with the shutdowns, lockdowns and social distancing, retail in all industries suffered a serious blow and the diamond industry wasn’t immune to that,” he said.
“The results of that is we are sitting on a certain inventory, they had no need to pull on anything from wholesalers, and they didn’t need manufactures as they were sitting on a pile of inventory and that worked all the way up the pipeline.”
Golan said some of them were sitting on a stockpile of a billion dollars’ worth of goods.
“So we are looking at an industry that is waiting patiently for consumers to return to store and renew their purchasing,” he said.
Another analyst Russel Shor said he doesn’t see retail holding it up very quickly.
“So I think we are going to have a long haul uphill. Encouragingly, the retail in the US has not been that bad,” he said.
“Independent jewelers have been doing okay and this is from a couple of surveys...So you had the high jewelers doing well and you had people catering to the fashion and lower ends of $1000 who were growing and the middle market people were relatively stagnant.”
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
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