Diamond exporters see a grim Christmas season

The Christmas season is usually a time of rising profits for the Gujarat diamond exporters. However this year, exporters fear that there might be a considerable fall in exports to the US, Japan, Hong Kong and European countries this season due to the decreasing demand for diamonds in these countries.

Speaking to Business Standard, Sanjay Kothari, chairman of the Gems and Jewellery Export Promotion Council (GJEPC), said: "This year's trend shows that exports of diamonds will be considerably low during the Christmas season.There are a number of reasons for the fall in exports, but the major reason is the recent fluctuations in the prices of oil and gold."

Around 50 per cent of the business is done during the period from November-end to the first week in January, every year, he said. Exports increase during this period as this is a season of festivities in the US, Japan, Hong Kong and the European countries.

However, he could not give an exact figure of the fall in the exports. "We would be able to give the exact figures only after January 5. However, looking at the export figures and the current situation of exports, it is certain that there will be a considerable fall in the diamond export during this Christmas season," he said.

As per GJEPC figures, the total export of cut and polished diamonds during November 2005 to January 2006 stood at $1851.7 million. Diamonds worth $6291.28 million were exported during April to October 2006, compared with $7,609.72 million during the corresponding period last year.

Chuni Gajera, partner of Surat-based diamonds manufacturers Laxmi Diamonds, is hopeful that the demand would increase as the season has just begun.

Apart from the economic depression in the countries like the US, Japan and European countries, the increasing trend of gifting electronics gadgets could also be a reason for the decreasing demand for diamonds, he said.

"Earlier, people in the US and Japan used to gift diamonds but the younger generation has developed a special liking for digital, hi-tech gadgets. People who used to gift diamonds and jewellery now prefer to gift high-end gadgets during the festival seasons," he added.