Diamond houses hope to cut through slump in next four months
Indian diamond houses, which cut and polish nine out of 10 stones, told banks last week that the next four months would be crucial.
The trade that suffered a 30% drop in prices of natural stones and dealt with over 50% slide in lab-grown diamond (LGD) prices in the past one year, is in touch with global mining giants like DeBeers for marketing assistance after putting a temporary ban on imports.
With China, the second-largest market refusing to pick up, the trade is betting on Diwali, US Thanksgiving (November 23), Christmas and finally Valentine’s Day to push out the unsold gems.
A lurking concern among the traditional diamantaires is that while the supply of mined diamonds has slowed following the import ban, there is no control over LGD prices as anyone having the money can set up LGD factories. But LGD players say the prices have stabilised with 2 out of 11 players globally going bankrupt.
“We met senior bankers on Friday.
We told them that the unsold stock has started to come down but the next four months would be vital.
We have controlled supply (of mined stones) though there is no such control on the supply over LGDs. LGDs, whose prices have fallen more, needs marketing support.
LGDs and natural stones should complement each other,” said Vipulbhai Shah, chairman of Gem & Jewellery Export Promotion Council, the apex body which had reached out to the leading international miners in putting in place steps to regulate supply.
A senior banker told ET the surge in profits in the last two financial years could cushion the slowdown and stock losses of firms hit by the price fall. The local diamond industry employs close to 2 million.
