Sentiment Improves in Weekend Trading at IIJS

Sentiment improved during weekend at the India International Jewellery Show (IIJS) as price sensitive buyers sought inexpensive, small polished diamonds. Suppliers have so far held prices relatively steady but they continue to hold large inventories of goods, Rapaport reported.
“The market has improved in the past 10 days and there are pockets of demand where you can make money,” said Anshul Mehta of Mumbai-based diamond manufacturer Rosy Blue. “Indian demand has improved and Chinese buyers are also looking for goods again, which is a good sign for the September [Hong Kong] show.”
Mehta reported that there is good demand for dossiers in VS-SI clarities and for loose pointer-size stones, while G-H color, VS2 clarity goods are particularly strong among Far East buyers. Demand for VVS clarity goods remains weak across the board, he noted. Ankit Shah, a partner at Ankit Gems, a manufacturer of rounds, princess and cushion-shape diamonds, agreed, adding that there is steady demand for VS1-I1 clarity stones while there is good demand for SI1 diamonds in the international market.
One Mumbai-based jewelry wholesaler who requested anonymity  reported that he is looking to buy smaller goods including stars, melee, one-sixth and one-quarter pointer sizes.
Shah noted that there is sufficient supply of goods at the moment but cautioned that shortages of SI clarity diamonds may emerge in the coming months as polished production is currently down. He explained that high rough prices have influenced manufacturers to curb their production in the past few months.
Rough Expectations
India-based Diamond Trading Company (DTC) sightholders expect that De Beers will reduce its rough prices by 5 percent to 7 percent at this week’s  sight. One Belgium-based sightholder exhibiting at IIJS believed that DTC would not make such drastic price adjustments but would rather change assortments to make its boxes more affordable. Most expect the sight to be small and valued at around $500 million to $600 million.
While many diamond cutters have reduced their cutting and polishing output, suppliers noted that they are holding relatively high polished inventories. “There is big stock in India and rough inventories are down,” Mehta said. “You can’t reduce manufacturing too much because factories will lose their workers.”
Low Retail Inventories
Despite the large polished inventories, few are in panic selling mode despite such tight liquidity in the market. “Some suppliers have made slight adjustments but nothing exceptional to influence the market,” said the Mumbai-based wholesaler. “Rough prices are high so they have to keep the finished product steady.”
He noted that retailers are holding low inventories but are not yet ready to replenish stock in a significant way. Shaishav Adani, sales manager at M. Suresh Company Private Ltd. agreed and noted that despite the recent uptick in demand buyers are still only buying to fill orders.
Beat Low Expectations
Most vendors who spoke with Rapaport News noted that jewelry wholesalers had a better show than diamond suppliers, given a resurgence in gold demand ahead of the Diwali festival and upcoming wedding season. Wholesalers noted that Indian consumers will continue to buy gold jewelry despite recent record gold prices quoted in rupee terms, as they expect further price appreciation.
While exhibitors noted that trading at the show beat their low expectations, they are hoping the momentum will continue through the rest of the year.
“We can’t say yet how much business has been done at the show but we can say that sentiment has improved,” said Rajiv Jain, chairman of the Gem & Jewellery Export Promotion Council (GJEPC), which organizes IIJS. “And that’s important because this is the time for retailers to buy and it should give a boost to Diwali.”
GJEPC reported that pre-registrations indicated that visitor traffic at IIJS rose 20 percent year on year. Traffic increased over the weekend and approximately 17,000 visitors attended the show on Saturday.