India's rough diamond buying to remain slow

Import of cut and polished diamond fell by 8.04 per cent to $1,502.09 million in the first quarter of the current financial year compared to $1,633.38 million in the corresponding quarter of the previous year

Indian diamantaires are looking to go slow on rough diamond purchase during the remaining quarters of the current financial year, thanks to weak global sentiment.

Despite being the world’s largest diamond processing hub, Indian units have cut down on rough diamond purchase in recent months. Data, compiled by the Gems and Jewellery Export Promotion Council (GJEPC), showed that India’s rough diamond import has declined 10 per cent to 38.49 million carats between April and June, 2014, from 42.74 million carats in the same period last year.

Import of cut and polished diamond also fell by 8.04 per cent to $1,502.09 million in the first quarter of the current financial year compared to $1,633.38 million in the corresponding quarter previous year.

“The demand trend is not encouraging globally. Hence, we estimate our rough diamond purchase to remain slow going forward,” said Vipul Shah, chairman, GJEPC.

The World Gold Council data showed global gold jewellery demand noseedived by a staggering 36 per cent in the period between April and June 2014 to $21.11 billion.

The slowdown in India’s rough diamond purchase is anticipated at a time when De Beers, one of the world’s largest rough diamond miners, invited applications from interested companies to become a sightholder for the next three years between April 2015 and 2018. A sightholder gets regular supply allocation of rough diamond from De Beers’ mines directly, in comparison with others participating in open auction.

Indicating a slowdown, Indias gems and jewellery exports recorded around 10 per cent decline in July 2014 from the level of $2,490.60 million in the corresponding month last year.

According to Sabyasachi Ray, executive director of GJEPC, there is a big supply surplus of certified stones, which have been accumulating over the last several months. India’s rough purchase will remain in tune with the ongoing trend in global jewellery demand. Since, the world jewellery demand is weak, rough purchase will also remain slow going forward, said Ray.

Meanwhile, Indian diamantaires are likely to apply aggressively for De Beers’ sightholding to ensure supply in the case of a resurgence in future demand.