Sharp increase in rough diamond prices is impacting workers

The sharp increase in rough diamond prices is adversely impacting the diamond workers of Surat, Diamond exporters reduced purchases of rough diamonds owing to high prices, thereby reducing the need for workers for cutting and polishing of diamonds.

As a result, in some cases, workers are being deployed for only three days a week. Rough diamond prices had started increasing from July onwards and the outbreak of Omicron in diamond mining regions of South Africa and Botswana pushed up prices another 20%.

“Since rough diamond prices have gone up, the cutting and polishing units are not replenishing the stock. This is why the work is less at the units,” Diamond Workers Union vice president Bhavesh Tank told ET. “The workers are not being called every day. Some units have cut down work on Saturdays too. Every day workers are coming to us and complaining about this.”

Workers in Surat cut and polish more than 85% of the diamonds available in the world. The diamond city has 6,000 polishing units, which employ nearly 700,000 people and clock an annual turnover of about Rs 1.45 lakh crore.

Tank said the union will take up the workers’ issue with the Gems and Jewellery Export Promotion Council (GJEPC) shortly.

Dinesh Navadiya, regional chairman (Gujarat), GJEPC, said: “The units are working on a need- based pattern now as rough prices have gone up. They are very cautious now so that their profitability does not take a hit. The industry had gone through a very bad time in the pre-pandemic period.”

When the demand revived after the second wave of Covid-19, the diamond units faced a paucity of workers, said Navadiya. “Now the situation has improved. However, high rough diamond prices are a matter of concern when there is robust demand across the globe. Polished prices have gone up 10-15% but a further rise is required to maintain profitability of the units.”

Gross imports of rough diamonds in April-October increased 168.04% year-on-year to Rs 77,572.59 crore. In volume terms, gross import of rough diamonds increased 115.24% to about 101 million carats.

During this period, gross exports of cut and polished diamonds increased 104.71% year-on-year to Rs 11,0679.18 crore.

Courtesy: Economic Times