Gem boss says volatile diamond prices ephemeral – report

Gem Diamonds chief executive Clifford Elphick said the current volatility in rough diamond prices, which is being caused by the European debt crisis as well as the weak Indian rupee, is likely to continue throughout the year, but maintained that longer-term price prospects are bright.
He was quoted by Reuters as saying that demand would continue to exceed supply, thereby forcing prices to resume their upward trend.
"There's no question that the volatility in Europe is having an impact, and on top of that the appreciation of the dollar against the rupee is a big issue," Elphick said.
The value of rupee had declined by six percent against the dollar since January, making it more expensive for Indians to import raw diamonds, while exports of cut diamonds are being restrained by the euro zone debt crisis.
Reports say India's diamond exports crashed by more than 50 per cent in May this year compared to the same period last year sparking off panic in the diamond cutting and polishing industry.
"In the very short-term, between now and October-November, we may well be in for choppy rides as confidence disappears," Elphick said.
"Prices will continue their upward trend over the long-term, definitely over the medium term. Over the short-term, I can't be so confident."

Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished