As the worsening situation in the world's biggest diamond cutting and manufacturing centre in India has started affecting the entire diamond value chain in the global market, Russian diamond mining company, ALROSA has come to the rescue of Indian diamantaires, Times Of India reports.
For the first time since the downturn in 2009, ALROSA has sold an estimated $130 million worth of rough diamonds to Russia's state-owned Gokhran in the second quarter of 2012 in order to bring price stability and to reduce the supply of rough diamonds in the global market, especially in India.
The company spokesperson, without disclosing the exact amount of rough diamonds sold to Gokhran, explained that the aim was to reduce its supply to the market after witnessing its customers' acute financing problems during the second half of 2012, which led to the decline in demand for rough diamonds in the first half of 2012. By reducing its supply to the market, ALROSA maintains what it calls an acceptable level of price stability during a period of lower demand.
ALROSA's move, according to industry experts, is expected to turn the fortunes of the Indian diamantaires and that they could hope for a speedy recovery in the polished diamond prices - the prices fell by 20 per cent in the past six months - before the forthcoming Christmas season.
"The global diamond mining has gone down this year and that there is a short supply of rough diamonds. This may further increase the rough diamond prices in the short term. However, the ALROSA took a wise decision of selling a huge stock of rough stock to Gokhran in order to reduce the diamond supply in the market. This will not only give stability to rough diamond prices, but it will also increase the prices of polished diamonds," a DTC sightholder, who is also a client of ALROSA, said.
Like De Beers, ALROSA's annual supply of rough diamonds is pegged at $5 billion and that it prefers to sell its goods to its clients based in India, Israel and Belgium through long term supply contracts. India is the biggest rough diamond importer with about $11 billion of rough stones imported in 2011.
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