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Diamond trade back on track during the past two months |
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KOLKATA: The diamond trade in India has in the past two months managed to clear a substantial portion of its polished-diamond inventory worth $1.5 billion, or about Rs 9,150 crore, piled up due to a 10 per cent fall in exports during April-August.
"Domestic markets have behaved better during Dhanteras and the US market primarily has responded better," Vipul Shah, chairman at Gem & Jewellery Export Promotion Council, said.
"Though the entire liquidity crisis is not yet over, there is some respite for the trade for the time being," he told ET.
According to the industry expert, the domestic market accounted for 20 per cent of overall demand in September and October while the rest 80 per cent has been sold to the world market.
While the rise in demand has brought some respite to the trade, it might prove to be short-lived because prices of polished diamond have dropped 3-4 per cent even as the prices of rough diamond, which are imported to be cut and polished in India, have gone up.
Ashok Gajera, managing director at Laxmi Diamond, said that if polished prices fall further, then the next quarter will not be profitable for the trade.
The import bill for rough diamonds have gone up to Rs 56,471.46 crore during AprilSeptember from Rs 50,074.21 crore a year earlier, despite import volumes falling to 744.75 lakh carats of diamond from 814.77 lakh carats during the first half of 2013-14.
Another major worry for the industry is a fall in global demand for solitaires. "The US, our major client, is buying small and mediumsized diamonds. We are hoping that they will look at bigger diamonds in November," Gajera said. Established diamond exporters are also perturbed over flyby-night operators who have entered the trade.
In fact, as ET reported in its Tuesday edition, intelligence agencies have already alerted the government and the Reserve Bank that the trade is being used to siphon off money out of the country.
Major players in the market have urged the Commerce Ministry to make obtaining registration-cum-membership certificate (RCMC) from the Gem & Jewellery Export Promotion Council mandatory for any export and import related transaction in diamond. Rise in sales in September helped the trade narrow the year-on-year gap in exports in value terms to 1.36 per cent during April-September from 10 per cent during April-August.
India exported 181.67 lakh carats of cut and polished diamonds during April-September at a value of Rs 72,798.08 crore, down from 191.54 lakh carats valued at Rs 73,804.47 crore in the year-ago period.
In September imports of rough diamonds increased 7.63 per cent to 129.63 lakh carats from 120.44 lakh carats a year earlier "in anticipation that sales will pick up over the next few months", a senior industry official said.
In August, the country had imported 74.15 lakh carats of rough diamond, 20 per cent less that August 2013.
Source : economictimes.indiatimes.com
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