China is a nucleus in the global
economy. It is a manufacturing
centre that contributes almost
16 per cent to the global gross domestic
product. Hence, when the country is
being overrun by a super-spreader like
coronavirus, certain amount of collateral
damage was expected. And Hong Kong,
one of the main centres for gems and
jewellery globally, is not too far away
from Wuhan, the city where this dreadful
virus first germinated. About 3350
manufacturing companies import and
export precious jewellery in Hong Kong.
The outbreak has left the jewellery
industry in a state of frenzy. In Hong
Kong, more than 15 cases have been
reported so far. The Hong Kong
International Diamond, Gem & Pearl
Show, one of the most important events
for the gems and jewellery industry
has been postponed. HKTDC stated
that the show which was originally
scheduled March 4 – 8 at the Hong
Kong Convention Centre and the
International Diamond, Gem & Pearl
Show scheduled March 2 – 6 at
AsiaWorld-Expo, will be postponed toMay 18 - 21 at the same venue.
Months of preparation ahead of
the show has been put to test with the
decision of postponing the show, as
many stakeholders believe that the new
timing of the show may not be fruitful
after all. It does seem like Hong Kong
has been jinxed, with issues cropping
up one after the other, first the protests
and now the deadly virus. The prodemocracy
protests proved a headache
to the entire gems and jewellery
industry, especially India, which
exports a third of its diamonds to Hong
Kong. Ahead of Chinese New Year
and Christmas, both very important
events in HK, the protests presented
a challenge, stunting the Chinese
economy to a large extent. A report
by Reuters suggested that the Hong
Kong government has shut 10 border checkpoints with mainland China but
stopped short of a complete closure.
The city which is full of opportunities,
always buzzing with activity is now fear
stricken with a weak morale, because
it is braving political, social and
economic problems at the same time.
We all acknowledge the great importance of Hong Kong and Mainland China for the global diamond and jewellery trade. The long term effect of the coronavirus will be measured in time. However, for the time being, given the current situation there was no other option than rescheduling the Hong Kong trade show. Hopefully the situation will be resolved very soon and we can all go back to business as usual. Shai Schnitzer, S.Schnitzer DiamondsGlobal Impact
Retailers and manufacturers in
Mainland China have closed down
indefinitely and Hong Kong too
declared a holiday till the first week
of March. The mass shutdown to curb
the spread of the virus has resulted in
a massive supply chain distress. The
concern for everybody in the industry is
that the pandemic is yet to be contained,
and its impact both domestically and
internationally will be felt for a long
time, as tourism will be hit hard. “We all acknowledge the great importance
of Hong Kong and Mainland China for
the global diamond and jewellery trade.
The long term effect of the coronavirus
will be measured in time. However,
for the time being, given the current
situation there was no other option
than rescheduling the Hong Kong trade
show. Hopefully the situation will be
resolved very soon and we can all go
back to business as usual,” said Shai
Schnitzer of S.Schnitzer Diamonds.
It is unfortunate but expected. Our industry will be greatly affected as the busy season really begins after the Chinese New Year holidays. Now with the postponement of the show and with more countries imposing travel bans on people travelling to and from HK, sales will be affected without a doubt. And with Chinese authorities asking many factories to delay opening, production of HK companies who have factories in China, will be halted, but expenses will still continue Manoj P. Butani,China is an important economic
centre for various trades and more than
17,000 people have been affected by
the outbreak, causing trades across
all sectors to come to a standstill.
“It is unfortunate but expected. Our
industry will be greatly affected as
the busy season really begins after the
Chinese New Year holidays. Now with the postponement of the show and with
more countries imposing travel bans on
people travelling to and from HK, sales
will be affected without a doubt. And
with Chinese authorities asking many
factories to delay opening, production
of HK companies who have factories in
China, will be halted, but expenses will
still continue,” said Manoj P. Butani of
Butani Jewellery, Hong Kong.
The newly announced dates of the
Hong Kong show also seems a little
tricky and whether it will attract enough
visitors or not is now in question as it
falls right after Basel and just before
JCK, add to that the fact that it falls
after the Ramadan season. “We can
only hope by then that the virus has
been tackled but it remains to be seen
whether customers will be will be
willing to travel to HK so soon after,”
adds Butani.
In its statement, HKTDC said, “the
safety of exhibitors and buyers has
always been a priority for the HKTDC.
In line with the measures taken by the
Hong Kong SAR Government against
the spread of the novel coronavirus, and
after consultation with representatives
of the jewellery industry, the HKTDC
will reschedule its HKTDC Hong Kong
International Diamond, Gem & Pearl
Show 2020 (originally scheduled for
2-6 March) and the HKTDC Hong Kong
International Jewellery Show 2020
(originally scheduled for 4-8 March) to
18-21 May 2020.”
I think it is a disaster for
the diamond industry.
If this situation does not
come under control, then
the financial situation
would be worst for the
diamond industry. We have
to gather and unite and
solve the problem as soon
as possible
Rashmin Donda,
Rainbow GemsThe virus first emerged in Wuhan, a
city in central China, in late December
and has killed more than 360 people
in Mainland China. Over 20 countries
have reported around 140 cases and all major airlines temporarily suspended
their flight service to China. “I think
it is a big disaster for the diamond
industry. If this situation does not
come under control, then the financial
situation would be worst for the
diamond industry. We have to gather
and unite and solve the problem as
soon as possible,” said Rashmin Donda
of Rainbow Gems, Hong Kong.
“Not much to say. Hong Kong has
been jinxed. Back to back negativity.
We’re all just praying and hoping for
everyone’s health and safety. Business
will bounce back after all this turmoil,
that’s for sure. Just need to pass and
survive through such bad times,” said
Harsh Maheshwari of Kunming Trading
Company. Some even believe if the
decision to postpone the show to May
was in haste as the extent of the virus
and whether or not it will be kept under
control by March is still not clear.
“We are currently negotiating with
the exhibition organizers regarding
cancellations and registration changes.
As of today, there has been no harm
to the diamond export growth forecast
due to the effects of the coronavirus,”
said Eran Zini, MD, Israel Diamond
Exchange.
Luxury brands have been affected
the most, with consumers keeping away
from stores. The effect on the demand
for luxury goods is not negligible. Many
reports suggest that the sales have
been hit harder than last year’s antigovernment
protests. “Postponing the
show seems to be deferring the decision
of cancelling the show as the impact of the virus is not yet fully assessed.
It will impact the business heavily in
all industries across the board. As
people will refrain from travelling and
every one would be looking forward
to assessing the actual impact of the
same,” said Sanjay Phophaliya of Indus
Jewellery. The virus is leaving a major
strain on the global macroeconomic
affairs and no one knows when the
epidemic will be contained and when
things would get back to normalcy.
There will be an impact for
sure on the diamond industry;
however, health is of foremost
concern. People who have gone
to villages for the holidays are
not in a position to come back
to Hong Kong and resume
work. The Shanghai Diamond
Exchange has announced
that work will be resumed in
February first week. So, we will
have to wait and see
Vipul Sutaria,
Dharmanandan DiamondsFear looms in Surat
Almost 300 diamond and gems and
jewellery companies participate in the
HK show every year. Thousands of
buyers who attend the show drive the
business of these Indian companies.
Surat, which is the cutting and
polishing hub of India, is set to lose
Rs 8,000 crore in the next couple of
months, leading to a 20 per cent drop
in exports because of the impact of the
outbreak.
Every year, Rs 50,000 crore worth
of polished diamonds are exported to
Hong Kong amounting to 37 per cent
of total polished diamond exports. As
Hong Kong has declared a month long
holiday, Indian diamond traders who
have offices in Hong Kong are coming
back to India.
“There will be an impact for sure on
the diamond industry; however, health
is of foremost concern. People who have
gone to villages for the holidays are not
in a position to come back to Hong
Kong and resume work. The Shanghai
Diamond Exchange has announced that
work will be resumed in February first
week. So, we will have to wait and see,”
said Vipul Sutaria of Dharmanandan
Diamonds.
It was an eventuality, the show either had to be postponed or cancelled. Around 30 per cent of our goods get exported to the Far East and now with the impact of the virus, we will definitely be losing some amount of business. Hong Kong has cordoned off its borders and even if someone wants to buy goods, they can’t Ankit Shah, Ankit GemsSeveral orders are placed ahead of the Hong Kong show and it is also a place where manufacturers get to know the pulse of the market and what the demand is like. “It was an eventuality, the show either had to be postponed or cancelled. Around 30 per cent of our goods get exported to the Far East and now with the impact of the virus, we will definitely be losing some amount of business. Hong Kong has cordoned off its borders and even if someone wants to buy goods, they can’t,” said Ankit Shah of Ankit Gems.
All of our major buyers are from the Far East. With the onset of the virus, we are going to lose out on business for sure. I foresee an 8-10 per cent dip in the exports in the first quarter and I don’t see the virus fading away anytime soon. The effect of the virus will be there till June. The show being postponed is also not a good thing. I don’t know how effective it will be as it is coinciding with Basel and JCK. We need to focus on other markets like Europe, U.S. and Middle East to make up for the lost business Vipul Shah, Asian Star The Indian trade was expecting a relief and a spike in exports after the U.S. China trade treaty. However, with the sudden outbreak of the virus, first quarter is not going to fair well. “All of our major buyers are from the Far East. With the onset of the virus, we are going to lose out on business for sure. I foresee an 8-10 per cent dip in the exports in the first quarter and I don’t see the virus fading away anytime soon. The effect of the virus will be there till June. The show being postponed is also not a good thing. I don’t know how effective it will be as it is coinciding with Basel and JCK. We need to focus on other markets like Europe, U.S. and Middle East to make up for the lost business,” said Vipul Shah of Asian Star
The other problem lies in the pricing of cut and polished diamonds. If the problem persists, the prices of polished diamonds will not increase resulting in the squeezing of the margins. No one knows when the virus will be contained, till such time, it is standstill mode for the industry.
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