Beers’ price cut a relief to diamond units
TNN | Updated: Nov 6, 2019, 7:11 IST AA
SURAT: Diamantaires are likely to get roughs at subsidized rates when diamond units reopen by the third week of November after the Diwali vacation. For, De Beers, world’s largest diamond mining company, has, for the first time, decided to cut prices of rough diamonds by almost 5% at its November sale, looking at the crisis in the diamond industry.
The annual rough diamond imports in India is pegged at about $18 billion. Industry sources said that softening of rough diamond prices would help improve market conditions further.
About 70% of the rough diamonds are imported from the big diamond mining companies including De Beers, Alrosa, Rio Tinto etc, while the rest is purchased directly from Dubai and Antwerp.
Supply of better-quality diamonds has diminished since July as manufacturers reduced their polished production and rough purchases.
India, which accounts for an estimated 90% of production, saw its rough imports fall 19% year on year to $3.11 billion in the third quarter and its polished exports drop 20% to $5.09 billion.
President of Surat Diamond Association (SDA), Babu Kathiriya said, “The industry is in turmoil and the price correction is the need of the hour, especially for small and medium diamantaires.”
Kathiriya further said that owing to higher rough diamonds and oversupply of polished diamonds, diamond units are running on wafer-thin margins.
A De Beers sigtholder on condition of anonymity said, “At November sale, De Beers not only cut prices of rough diamonds but also allowed clients to defer goods to adjust to the market conditions. However, there were few rejections as the prices were lowered on the boxes.”
Nilesh Bodara, a diamond exporter said, “There has been complete miss-match in the rough and polished diamond prices for quite a long time. Only when the diamantaires will get cheap rough they will be able to earn profits. I am pretty sure that the market will improve after De Beers’ decision.”
Industry leaders stated opine that many others may follow De Beers’ example, thereby making rough diamonds a bit cheaper for the diamantaires. Diamond industry in Surat manufactures about 90% of the rough diamonds mined across the world.