16 Jul 2019
DiamondWorld Directory
Home |
Archival
Home
A Flicker at the end of the Darkest Tunnel ?
For the diamond industry and trade which have been struggling through extremely trying times, there is a flicker of hope, if not for the short-term, at least for the coming year. The US Federal Reserve Chairman, Ben Bernanke has hinted that recession may probably end this year and recovery may begin next year.
By: Diamond World News Service
|
Apr 27 2009 3:38PM
|
Reference: 3743  

DecreaseIncrease

Current Problems :
This means that the diamond industry and trade may have to wait for a few more months before the business outlook starts improving. As for the current period, problems of subdued demand, heavy inventories and liquidity-crunch persist. This is quite natural as the diamond industry is pre-dominantly an export-oriented undertaking and is driven by demand. With the slump in demand for polished diamonds in the world market, the industry is caught in a critical situation, as buyers for polished diamonds are few and far between, hence the accumulation of unsold stocks.

Unstable Market for Rough :
According to trade sources, there is yet no stability in the market for rough diamonds. Despite very limited sales by the main suppliers in the first two months of 2009 compared with the same period of the earlier year, rough diamonds remain easy in the open market. Most Varieties of rough diamonds are available in the open market at varying discounts. This is because of limited demand for and subdued prices of polished goods in view of recession in the major consuming markets. Some demand is noticed in clean stones, but that is not enough to lift up the mood of the market. Bigger diamonds of 5-10 carat in size which were keenly sought by investors until mid-2008 are now friendless. Things can change for the better if prices stabilize. However no one is in a position to predict how long that will take.

Cutting Centres: Curtailed Working
Meanwhile, reports from the cutting centres do not make happy reading. Though no precise information about this is available at present, trade circles estimate that the manufacturing units that are in operation, are by and large operating at significantly reduced capacity , while many others remain closed. Over four lakh workers are estimated to have lost their jobs in India.

Task Force Report Unhelpful :
The Reserve Bank of India (RBI) hurriedly constituted a Task Force for the diamond industry which has submitted its report on the problems of the Indian diamond industry in a record time of just about a fortnight and its suggestions to mitigate them, The Task Force’s report has however failed to inspire confidence in the industry and trade. It is unlikely to help much in reducing unemployment in the industry, unless the demand for polished diamonds revives. This however depends on the return of global consumer confidence.

Antwerp Market Turns Quiet :
Reports from Antwerp indicate that the diamond business activity there has suffered a considerable setback. Banks are becoming extra cautious in advancing more credit facilities. The number of buyers who used to visit Antwerp to buy rough diamonds has come down substantially.

Tight Money Situation :
Money conditions there as well as here remain tight. According to trade sources, overseas payments continue to be delayed much beyond credit terms. Funds are however locked up in unsold stocks. The consequent money stringency is reflected in the high interest rates ranging from 1.50 to 2.00 per cent per month on borrowings from non-official sources.

February Dispatches Down :
Meanwhile, according to preliminary statistics available from the Gem & Jewellery Exports Promotion Council shipment of cut and polished diamonds from the country in February 2009 declined to US$ 872 million (Rs. 4224.94 crore) from US$ 1,340.20 million (Rs. 52,46.89 crore), indicating a drop of 34.87 per cent in dollar-terms and 18.48 per cent in rupees. Cumulative shipments of cut and polished diamonds for the April-February period of 2008-09 have amounted to US$ 11,876.45 million (Rs. 53,004.59 crore), against US$ 12,700.44 million (Rs. 5,11,709 crore), indicating a fall of 6.29 per cent in dollar terms but a marginal improvement of 3.99 per cent in rupees, thanks to the depreciation of the domestic currency.

Lackluster Jewellery Exports :
Shipment of gold jewellery in the first 11 months of 2008-09 have amounted to US$ 4,764.68 million (Rs. 21,264.75 crore), compared with US $ 5,007.32 million (Rs. 20,174.51 crore) in the same period a year ago indicating a decline of 4.85 per cent in dollar-terms but an improvement of 5.40 per cent in rupees.

Rough Imports Decline :
Imports of rough diamonds during the first 11 months of 2008-09 are lower by 20.12 per cent in dollar-terms and by 11.31 per cent in rupees at US$ 7,249.39 million (Rs. 32,839.73 crore), against US$ 9,075.36 million (Rs. 37,027.47 crore) in the same period a year ago.

Bullion: Boom for Investors !
As most other asset markets have turned unattractive, bullion continues to attract investor’s attention, though individual buyers continue to avoid purchasing gold because of its high prices. Increasing activity of Exchange Traded Funds is also helpful in the present buoyancy in bullion. In the overseas market, the yellow metal was placed at US$ 925.10 per oz. and silver at US$ 13.02 per oz. on March16, 2009. On the same day, standard gold was placed in the local market at Rs. 15,205 per 10 grammes and silver at Rs. 22,260 per kg.

Have Your Say
* Your view
* Name:
* Email:
* Town/city:
* Country/State:
Sort by: 
 Newest 
 | 
 | 
 | 
 Agree 
 | 
rakesh
(Indore)
abc
Advertisement
M. Suresh234x60
Search News by City
Advertisement
Kosher 23460
Advertisement
Kosher 23460
Recent Issue
2019
AVAILABLE NOW...!
Advertisement
Kosher 23460
News in Pictures
Videos
Stunning Jewellery from Cannes 2019
Pictures: 24
Sparkly Jewels at Oscars 2019
Pictures: 19
Golden Globes 2018
Pictures: 15
Spotted: Who Wore What (December 2018)
Pictures: 4
India Diamond Week
Pictures: 8
Spotted: Who Wore What (October 2018)
Pictures: 7
Spotted: Who Wore What (September 2018)
Pictures: 6
70th Emmy Awards
Pictures: 11
35th India International Jewellery Show 2018
Pictures: 46
Spotted: Who Wore What (August 2018)
Pictures: 4
JJS - IJ Jewellers Choice Design Awards 2015 powered by GIA
Views: 15342
GJEPC Chairman Interview
Views: 14140
IJ Jewellers Choice Design Awards 2012 - Part 1
Views: 20973
Promo for IJ Awards 2012 at NDTV Profit
Views: 33699
IJ Jewellers Choice Design Awards 2012- Part 2
Views: 37014
Couture India 2016 - A Business Boutique Show by IJ Magazine
Views: 11641
Savjibhai Dholakiya, Surat Businessman (Diamond Merchant) speaks in Vibrant 2015
Views: 35148
IJ Jewellers Choice Design Awards 2013 - NDTV Video
Views: 33225
Advertisement
KGK_Antwepr
Advertisement
Big Sub-IJ/DW
Member of:
Supporter of: