Diamond jewellery to become costlier by 5% on rough price rise

De Beers raises rough diamond prices by 3-5%, to affect consumers' robust festive mood in India

Diamond ornaments are set to become costlier by at least five per cent this festive season, on Indian diamantaires’ decision to pass on the rise in prices of rough diamonds (‘roughs’ in trade parlance) to consumers.

Diamond Trading Corporation (DTC), the online auctioning arm of London-based De Beers, prime miner and supplier, has raised rough prices by three to five per cent across all categories for October sales. Rough import from Russia has also become costlier, by two to three per cent.

The benchmark diamond price here is about Rs 3.85 lakh a carat.

“Cut and polished diamond prices will increase proportionately, as processors would certainly pass the rough price increase to consumers,” said Mehul Choksi, managing director of Gitanjali Gems, also one of De Beers' sightholders (authorised bulk buyer of roughs).

De Beers contributes around 40 per cent of global rough supplies. Since 11 of 13 roughs mined globally are processed in India, any price rise affects Indian processors directly. De Beers has a near-monopoly on supply of roughs to India through close to 40 sightholders, beide online auction participants. Other rough suppliers are Australia-headquarterd Rio Tinto and Russian mining company Al Rosa.

“DTC has reduced its sales in October,” said Vipul Shah, chairman of the Gems and Jewellery Export Promotion Council, without quantifying the cut.

Indian diamond jewellery manufacturers and exporters are currently witnessing a rebound on consumer sentiment, both here and abroad, after some months of a lull. Jewellery sales in the domestic markets are expected to remain robust during the ongoing festive season, with upbeat business sentiment likely to add glitter. Also, a steep fall in gold and silver prices has made investment in diamond jewellery attractive.

The festive, wedding and thanksgiving season (abroad) comprises a third of annual sales. The economic uptrend in America has raised jewellery orders from India. Experts estimate a 10-15 per cent jump in orders for this festive season, which will reflect in October’s gems and jewellery export figures, said Samir Sagar, Director, Manubhai Jewellers.