Miners restore a part of rough diamond supply on hopes of festive demand

Industry banking on 60-day festival sales that start with Diwali and encompass Christmas, New Year and Chinese New Year

diamonds
Dilip Kumar Jha Mumbai
2 min read Last Updated : Oct 14 2019 | 11:47 PM IST
Anticipating a revival in global demand, leading diamond miners, including Russia’s Al Rosa and London-based De Beers, have ramped up their rough diamond supply in the last few weeks to Indian cutting and polishing centres, experts say.

Al Rosa and De Beers cumulatively contribute 65 per cent of the world’s total rough diamond supply, amounting to about 145 million carats. Owing to the global economic slowdown, the two global miners had cut their rough diamond supply by up to 40 per cent in the last few quarters to control oversupply.

“But the demand for polished diamond has revived, albeit slowly, to replenish the pipeline inventory that had depleted over the past three quarters. Diamond jewellery demand in the US has been good. Only China and India’s domestic demand is struggling, which we hope will revive in the coming months. Peak season demand starts with Diwali in India followed by Christmas and New Year across the world and also the Chinese New Year. We hope for a revival in diamond jewellery demand during this 60-day celebration period,” said Anoop Mehta, President, Bharat Diamond Bourse, the world’s largest diamond trading centre.

The apex trade body, the Gems and Jewellery Export Promotion Council (GJEPC), felt the need to ease financing for small and medium enterprises (SMEs), the backbone of India’s gems and jewellery trade.

“Against one large credit to a giant corporate house that comes with the risk of default, lenders can service thousands of SMEs, which often back their borrowing with more than 100 per cent collateral. Gems and jewellery companies have borrowed only 10 per cent of the cumulative export value. The remaining 90 per cent of the business in the sector is self-funded,” said a senior industry official.

“There is no bankruptcy in SME units in the gems and jewellery sector. Banks and financial institutions should extend loans to SMEs against their offices within the BDB. With prices having stabilised at low levels, this is the best time to invest in diamonds,” said Mehul Shah, Vice Chairman, BDB.

Mehta anticipates miners will restore rough diamond supply fully by June 2020.

Topics :Diamond industryMining industry

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