Diamond demand, prices shine
With the U.S. market forecast to gain in high single digits in 2014, Indian diamantaires train their focus westward, even as domestic demand surges.
Posted: Monday , 09 Jun 2014
Mumbai (Mineweb) -
After trading lower for most of 2012 and flat all of 2013, prices of polished high quality diamonds are suddenly soaring higher. While places in South India have registered a hike of 40% to 50% in diamond prices, diamonds in Mumbai are more expensive by around $506 (Rs 30,000) for a one carat stone.
The price of big stone carats have also jumped by 20% in North India. Jewellers have attributed the sharp rise due to lower supplies and higher demand in the country, reflecting a positive outlook for the diamond sector.
Bangalore Jewellers' Association's DV Ramesh has maintained that the shortage in the market has been brought about by an increasing rarity of diamonds from the diamond mines of Africa, Australia, Canada and Russia, which are no longer producing very high quantity of gems.
Moreover, since no new mines are being discovered, the global supply is expected to plummet further, impacting international and domestic markets, he added.
De Beers, the world's biggest diamond mining company, has also announced that it plans to raise diamond prices by 5% every year in a phased manner. The Indian diamond industry is particularly buoyed by the increase in demand for polished diamonds from the US, Hong Kong, China, UAE and other diamond consuming nations.
Gems and Jewellery Export Promotion Council has said that US polished diamond imports rose 18.8% year on year to $2.03 billion in April. Net polished imports jumped to $426 million as compared to $101 million a year ago.
For the first four months of this year, US polished imports have risen 9.5% year on year to $7.48 billion, while polished exports have increased 8.3% to $6.57 billion, leaving net imports up 18.9% to $909 million.
As per data of the Council, India's polished diamond exports increased by 25.47% in 2013-14, as compared to the previous year. The growth in polished diamond exports was witnessed after September 2013, with officials saying the trend is still continuing.
"The US market, which accounts for 37% in the diamond jewellery segment of the world, is forecast to gain in high single digits in 2014, while there is a good momentum in the Chinese market as well. Domestic demand is also expected to revive this year after a collapse in the rupee, which dented the sales of diamond jewellery in 2013,'' said Manishbhai Kothari, a diamond exporter.
He added that domestic gold jewellery demand has also surged over the last few weeks.
"Though exports of gems and jewellery from India dropped 16% to $2.48 billion in April 2014, the first month of the current fiscal, exports of gold jewellery continued to grow for the third month in a row despite the curbs on gold imports,'' said an official from the Council.
He added that last week, the Council had launched a new business development and marketing campaign to the US, Canada and South America. The purpose of the campaign is to reinvogorate, strengthen and expand the business of Indian diamantaires.
India’s gems and jewellery exports to the US stood at $4.79 billion in 2013, as compared to $4.03 billion in 2012, indicating an increase year on year from 11% in 2012 to 13% in 2013.
While the Council is setting up a series of in depth Business Development Conferences, so that the Council and its colleagues in America would have an opportunity to meet in person and discuss issues, the two groups would also work on developing `best practices' directed towards the rapidly changing business landscape.
Additionally, the Council plans to sponsor activities that would support and bolster more work between the two nations.
Council Chairman Vipul Shah said, "We know that the US, Canadian and South American markets are uniquely important to our Indian gem and jewellery industry. India is one of the leading and preferred importing and sourcing destination for these regions.''
The Council would also be presenting the India Pavilion for the 11th consecutive year at the JCK Las Vegas Show, with around 65 top exporter members from the gem and jewellery sector, including studded jewellery, diamonds and coloured gemstones.