16 Jul 2019
DiamondWorld Directory
Home |
Archival
Home
Diamond Trade Optimistic About Revival of Domestic Demand
New Government Expected to Re-Vitalize Sluggish Economy
By: MD Diwani
|
Jul 22 2009 11:06AM
|
Reference: 4017  

DecreaseIncrease

The diamond trade and industry are having a glimmer of hope now that the domestic demand for diamonds and diamond-studded jewellery may slowly improve in view of the establishment of Congress-led stable government at the centre, committed to inclusive growth. Earlier fears that 2009 Lok Sabha elections might throw up an unstable government and lead to possible mid-term poll have disappeared now. The new government is expected to make more determined efforts to lift up the country’s economy from the present recession.

Feel-good Factor :

It is felt that this may bolster a feel-good factor and keep the stock market as well as other markets in a happier mood. Until now most people associated with these markets seemed reluctant to spend much on luxuries. Their mood may gradually change with the improvement of the country’s economic prospects.

Overseas Signals Mixed :

However, signals from the US market, the largest consumer of diamond jewellery in the world, remain mixed. For instance, unemployment there remains at 25 year high, and establishment of new houses has also remained slow. Also, retail sales in the US were slow in April, 2009. On the other hand, the Conference Board’s Consumer Confidence Index improved to 39.2 in April 2009, from 26.9 in the earlier month. Still it is much lower than 62.3 in April 2008. The stock market was in better mood. It was generally believed that the worst phase of meltdown might be over for the US economy. President Barack Obama’s administration in marking a determined effort to stimulate US economy. Slow recovery is therefore expected to be visible sometime towards the end of 2009, unless some unexpected adverse development upsets this calculation.

Demand Highly Selective. : Meanwhile, in view of the drastic cuts in the supply of rough diamonds by major producers in the past couple of months prices have more or less bottomed out. In certain varieties such as G, H and I colors and S1/VVS clarity, prices have improved more due to supply shortage than to any significant improvement in offtake. Demand is highly selective and confined to such select categories. Prices of other varieties remain subdued. Trade sources, however, rule out any setback in prices as supplies and stocks are down.

Price-Trends Changing :

Referring to the price trends, trade circles point out that earlier published prices used to be discounted by 20 per cent. These came to be discounted by 35 per cent when the market condition deteriorated. Currently these are discounted by 30 per cent.

Shortage of Workers :

Some of the diamond manufacturing units that were closed almost since Diwali have reopened and seem to be working partially. Some of them are now experiencing shortage of workers, as many artisans who were earlier retrenched by the industry, have either settled down in some other industries or in agriculture. Some of them may still be unemployed but they do not seem inclined to come back to the diamond industry which does not offer employment security.

Jewellery Units in Doldrums :

Just a couple of jewellery units in the SEEPZ area near Mumbai, are in operation at present. This is because most of them were dependent on the US market for jewellery exports. As the US market is extremely quiet, several of these jewellery units have rolled down their shutters.

China’s Domestic Market Better :

Some reports from abroad indicate that the domestic market for diamonds and diamond jewellery in China remains fairly active. Diamond manufacturing activity has also expended there. Reports from Moscow indicate that nearly 50-55 of its 60 diamond manufacturing units remain idle at present. Most of the rough diamond production by the state owned Alrosa continues to be diverted to Gokhran, the state owned stockpile.

Export Shipments Decline :

Meanwhile, the new fiscal 2009-10, has commenced with a significant drop of 39.13 per cent in shipments in April 2009 to US$ 765.64 million, compared with US$ 1,257.73 million in the same month a year ago. Likewise, dispatches in terms of quantity also fell by 26.35 per cent to 25.30 lakh carats in April 2009, compared with 34.35 lakh carats in the same month of the earlier year.

Rough Imports Shrink :

Imports of rough diamonds declined by 54.09 per cent to US$ 457.98 million, from US$ 997.62 million in the same month a year ago.

Gold Jewellery Exports Subdued :

Gold jewellery exports were lower by 12.98 per cent at US$ 301.13 million, compared with US$ 346.06 million in the same month of the previous year. Most gold jewellery exporters are facing tough times, as the USA, their major export market, remains quiet.

Bullion Marking Time :

In view of the firming up of the US dollar and the stock markets turning active, investors have diverted their attention away from bullion. On May 19, the yellow metal was traded abroad around US$ 923.7 per oz. and silver at US$ 13.97 per oz. In the domestic market, standard gold was traded on that day at Rs. 14,295 per 10 grammes and silver at Rs. 22,235 per kg.

Have Your Say
* Your view
* Name:
* Email:
* Town/city:
* Country/State:
Advertisement
M. Suresh234x60
Search News by City
Advertisement
Kosher 23460
Advertisement
HouseAd_Trade Fair
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: 14139
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
Member of:
Supporter of: