Diamond exporters in Mumbai and Surat are already in a fix due to accute shortage of goods, which is resulting to be deterimental to their business considering they have a surplus of orders to fullfill. The holiday season has boosted demand from US, China and Europe but supply crunch has left diamond exporters in a fix. Add to this an increase in rough pricing by 10 per cent because of the new Covid variant has really made the situation more difficult.
As a result, exporters are holding back on their stock, because they don't want to replenish their current stock with new inventory, which they might have to buy at a premium. An extended Diwali break was proffered as a solution to keep the supply-demand balance in check, however, diamond rough prices have continued to go up, while polished prices have remained the same.
The consequences of the Omnicron on mining in the South African countries, where most diamond mines operate are yet to be clear. If mines shut down, then it will have a great impact on the trade, which is currently basking in robust demand.