Roughs shortage weighs heavily on diamond units

Surat: Even as the demand for polished diamonds has improved in the international market ahead of Christmas season, it has failed to bring cheer among the diamantaires of Surat, the world’s largest diamond polishing and cutting hub.

The industry is facing a severe shortage of rough diamonds to meet the ever-increasing demand. The Rs 20,000 crore worth of polished diamond inventory is almost exhausted and that the diamantaires do not have enough rough diamonds to meet the growing demands.

The primary reason being restrictions on international flights. The diamantaires are unable to visit countries like South Africa and Belgium to purchase the rough diamonds. This has also resulted in 56% fall in import of rough diamonds between April and September, which according to experts is very abnormal.

Figures released by the Gems and Jewellery Export Promotion Council (GJEPC) stated that the rough diamond imports were down to $2.5 billion from $5.8 billion in April-September last year.

During the same period, the export of polished diamonds too declined 36% to $5.5 billion compared to $8.6 billion in the previous year.

Industry experts said that rough diamonds above one carat needs physical examination before making a purchase. This, however, has not been possible because of the restriction on international travel.

“We have the supply order of polished diamonds worth Rs 10 crore to our buyers in Hong Kong and US, but we don’t have enough stock of roughs for the supply. There is a huge section of diamantaires who personally visit Antwerp and South Africa twice a month to purchase rough diamonds, which is not happening since lockdown,” said Nilesh Bodara, diamond manufacturer and exporter.

The polished diamond inventory levels in Surat’s diamond industry has gone down in the last seven months as the units have drastically cut down on production due to Covid-19 restrictions.

Vipul Shah, vice-chairman of GJEPC told TOI, “International flight restrictions has cast a dark shadow on the prospects of the diamond industry in Surat and Mumbai. We have demanded the central government to allow the sale of rough diamonds in the Special Notified Zones (SNZs) in Surat and Mumbai on the turnover tax of 0.125% from the mining countries.”

Shah added, “The direct sale of rough diamonds at SNZs will resolve the problems faced by small and medium diamantaires who are unable to visit Belgium and South Africa for diamond purchases.”

Courtesy: TOI