The reopening of factories in India post-Diwali was generally delayed by 2 weeks in response to sluggish market conditions. The challenges that faced the market in the lead-up to the Diwali holiday remain unchanged. Global economies are still facing rising inflation rates and consumer demand for polished is slow, with prices softening, says a press release from Trans Atlantic Gem Sales (TAGS).
According to the report, hopes that China would show signs of improvement have not been forthcoming as it persists with its pandemic policies, causing great concern amongst the midstream players. Supplies of Russian rough, which as it is understood had been finding their way onto the markets, despite severe restrictions, have now all but ceased. This in part explains why the prices of smaller-sized rough have remained relatively firm, while 3 grainers and larger sizes have seen a greater level of correction over the past few months.
Manufacturers refrained from buying rough in the lead-up to Diwali, which also supports the current demand for smaller sizes and cheaper qualities which are required for the factories that will be reopening now.
This factory-driven demand will likely remain in hopes of good Thanksgiving, and seasonal sales.
In the midstream, Indian manufacturers face further challenges, of high levels of polished stocks, reported to be between 4 and 5 months, coupled with reduced liquidity and high-interest rates.
TAGS presented around $23m of Southern African production to over 120 companies from all the leading centres. Due to the more commercial ranges of goods shown this month, across a full range of sizes, it was successful in selling a higher proportion of goods than in September. Selling prices were reportedly in line with last month, and TAGS did not see any further decline in price in the + 3gr ranges, smaller sizes maintained their price, and there was a marginal increase in cheaper ranges and Brown goods.
TAGS’ next tender event will take place from the 7th to the 13th of December at the Dubai Diamond Exchange.
Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough&Polished
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