India Will Have Fewer Rough Diamond to Process

The Indian diamond industry would have fewer rough diamonds to process in the coming days as the weakening rupee has drastically reduced the purchasing power of diamantaires, including big companies.

As per the official data of Gems and Jewellery Export Promotion Council (GJEPC), India imports an average of $1 billion worth of rough diamonds every month. In May 2013, India's rough diamond imports increased 45 per cent to $1.640 billion.

Industry sources said the purchasing power of diamantaires, including that of the diamond companies enjoying bank credit facilities have reduced by almost 15 per cent in the past fortnight.

India imports $15 billion worth of rough diamonds per annum and about 90 per cent comes to the world's biggest diamond cutting and polishing centre in Surat for cutting and polishing. A diamantiare buying $10 million worth of rough diamonds every year will have only $8 million to spend on the rough diamond purchase due to the weakening of the rupee against dollar.

Aniruddha Lidbide, diamond analyst, told TOI, "Forget about the purchasing power, the diamantaires will not be able to buy rough diamonds in the coming days if the rupee does not recover against dollar. As of now the import of rough diamonds has completely stopped in the country."

According to Lidbide, only the diamond mining companies like De Beer and Alrosa, which control around 60 per cent of the rough diamond supplies in the world, could bail out the Indian diamantaires by reducing the prices and offering more discounted goods in the tender auctions to the non-sightholders.

Babu Patel, a rough diamond trader in Mahidharpura diamond market, said, "Most of the big diamond companies have either parked their money in the real estate business or the rough diamonds. They (big companies) have huge stockpiles of rough diamonds, but small and medium diamantaires cannot buy because of high premium rates they charge in the secondary market."

http://articles.timesofindia.indiatimes.com/2013-06-27/surat/40232737_1_rough-diamonds-indian-diamantaires-alrosa