Diamantaires cut short workers’ Diwali vacation as orders pile up
India’s diamond trade is getting closer to its pre-Covid sparkle, thanks to the renewed demand from the United States and Europe, which together account for nearly half of our polished diamond exports of about ₹1.32-lakh crore.
The diamond exporters from Surat and Mumbai are seeing signs of a strong revival. Most of the piled-up inventories of polished diamonds have been exhausted and polishers have increasingly started sourcing of rough diamonds to execute new orders.
Provisional data with the Gems and Jewellery Export Promotion Council shows imports of rough diamonds in September 2020 stood at 163.71 lakh carats worth ₹9,906 crore, as against 152.24 lakh carats worth ₹8,232 crore in September last year. This is first time since February, the rough diamond imports have increased on year-on-year basis. In February 2020, rough diamond imports stood at ₹10,488.16 crore, as against ₹9,829.38 crore in the same month last year.
The ₹1.8-lakh crore Surat’s diamond market is the world’s biggest diamond polishing hub employing over half a million people across 6,000 polishing units. The industry had faced its toughest test for survival during the lockdown, with sales dwindling to lowest ever and large-scale exodus of the workers back to their natives amid fears of catching the coronavirus infection.
Surat polishes nine out of 10 rough diamonds in the world with most of them getting supplied back to the overseas markets. The COVID-19 caused disruptions not just for the processing sector, but also disturbed the purchasing strength of the consuming markets such as US, Canada, Europe, China, Hong Kong, Japan among others. Ravi Dholakiya of Radheshyam Diamonds in Surat said the past two months have changed the scenario for the sector with fresh orders coming in from the US and Europe. “The mood is good, especially after nearly 3 months of almost no business during lockdown. But now our sales are improving with every passing month. Initially, China and Hong Kong gave some good business but due to political trouble there, US has now become our steady market for exports. We believe the momentum to continue at least till the beginning of new year 2021,” he said.
The diamantaires are now facing shortage of manpower and raw material i.e. rough diamonds. The industry has cut down on the Diwali vacation for the diamond workers from a usual 20-day vacation to just 5 days.
Uptrend in prices
A veteran diamond expert Pravin Nanavati said due to travel curbs, the purchases for rough diamonds isn’t happening at the pace it is required. “There is no stock in the pipeline. The polishers are hand-to-mouth for rough diamonds. Polished diamond demand is likely to remain firm till Christmas,” he said adding that this has led to marginal increase in the rough diamond prices.
In the current Covid-hit scenario, when other investment asset classes are volatile, a large section of global investors are believed to have turned to diamond for its haven quality, Nanavati informed.