22 Sep 2021
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How are diamond jewellery manufacturers managing scarcity of niche goods?-Price Vs Demand
World over demand for diamond jewellery is steadily rising, however manufacturing and certification of loose diamonds isn’t matching the demand levels. This is resulting in several forms of demand-supply inequalities. R Sugandha finds out from diamond business owners how this uncertainty is affecting their business
By: Diamond World News Service
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May 24 2021 4:17PM
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Reference: 25598  

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Diamonds are always on top when it comes to demand. No matter what. This is because diamonds are eternal. When we think about giving a loved one a piece of jewellery as a memorable gift, the first thought is about diamonds. Also because of the current situation people haven’t been able to spend on vacations or weddings, so that’s why during these times also people feel that it’s a wise decision to invest their savings in buying diamond jewellery which will be an investment for life Viral Kothari, Kosha Fine JewelsDiamond markets showed a mixed graph in April. A good business recovery in the U.S. and China drove optimism, but sentiment weakened due to the spike in Covid-19 cases in India. Suratbased manufacturers reduced capacity as infection rates rose. Grading labs experienced a backlog because of operating restrictions. Lower inventory levels supported polished prices. Prices for 1ct diamonds increased 2.5% during April and was up 4.2% from January 1.

According to Viral Kothari, founder and director, Kosha Jewels, “Diamonds are always on top when it comes to demand. No matter what. This is because diamonds are eternal. When we think about giving a loved one a piece of jewellery as a memorable gift, the first thought is about diamonds. Also because of the current situation people haven’t been able to spend on vacations or weddings, so that’s why during these times also people feel that it’s a wise decision to invest their savings in buying diamond jewellery which will be an investment for life.”

Demand- supply tango continues
Supply and demand dynamics play a great role in price determination. this shape. We are immensely grateful to our erstwhile suppliers who have kept supplying diamonds even during the pandemic and this has enabled us to fulfill orders in time. So we have never had to face difficulty,” explains Viral Kothari. In case the supply of a particular variety is short, Viral Kothari usually waits for the right cut and quality and does not compromise on the quality of his jewellery and he doesn’t mind paying extra and getting the desired goods and right quality to complete orders. Explains Ashish Goyal, Kotawala Fine Jewels, “After a while, diamond mining companies halt the mining process as it is not profitable and hence in some time the prices get corrected, right now, this is the situation. The moment prices drop to a certain level then it becomes unprofitable.”

Due to Covid, globally a lot of mines halted their production and even in India where majority of rough manufacturing takes place the processes were halted. “This stemmed from many reasons such as travel restrictions, miners being forced to work in smaller capacities or local lockdowns in certain places which prevented a few miners from operating at all,” opines Poonam Kothari of Flawless Company.

Most jewellers rely on long standing relations developed with their suppliers to ensure unstinted supply of cut and polished diamonds. “In the last few months the prices of smaller coloured diamonds have increased and there has also been a drastic shortage of smaller sieves, comparatively the pear shape diamonds are easy to source since the movement in the market is slow for

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