Christmas, Diwali add sparkle to diamond demand

Diamantaires expect the demand to rise further

Slowly but steadily Surat diamond industry is regaining its lost sparkle. After witnessing tough times in the first half the current year, diamond demand has shown signs of improvement in the wake of festive seasons of Diwali and Christmas round the corner. The industry players expect the demand to increase further post Diwali vacation.

"The recessionary pressure in US, the largest market for diamonds in the world, is easing. There is demand from Middle East as well. This has helped arrest the fall in demand of diamonds and market has started improving", said Vasant Mehta, chairman, Gems and Jewellery Export Promotion Council(GJEPC).

Around 3,000 diamond cutting and polishing units in the diamond city of the country - Surat were operational before Diwali last year. Majority of them were forced to close down due to global recession. "However, close to 2,000 units have now resumed operations. At present, the demand has improved due to Diwali and Christmas", added CP Vanani, president, Surat Diamond Association (SDA).

Surat-based diamond units have seen demand from Japan, Europe, US and Bangkok. "In addition to this, local demand has been also growing constantly as the purchasing power of Indian consumer is growing", he said, adding, "The business has surged to 40 per cent from almost negligible during the first quarter of this calendar year.

Prices of rough diamonds, which had bottomed out earlier, have now reached to previous year's level. The prices are also stablising. After Diwali vacation, diamond industry expects production and demand to increase further as Christmas moves closer.

Though the demand for diamonds has improved, the diamond industry's problems are refusing to die down. At a time when production is increasing, the diamond units are facing manpower shortage. At present, the number of diamond workers in Surat is only 2.50 to 3 lakh workers, which was 4 to 4.50 lakh previous year.

"Many diamond workers switched over to other businesses like agriculture, textile and embroidery as cutting and polishing units brought their shutters down. We hope more workers to resuming their jobs after Diwali vaction", Vanani stated.

It may be mentioned here that many diamond units are offering higher wages to attract skilled labour to over come the problem of manpower shortage.