THE Indian diamond industry, that was hoping for a semblance of recovery in exports ahead of Christmas, is bracing itself for rough times. A poor demand from the US and Europe — India's largest jewellery importers, a fluctuating currency and volatile gold price have added to the problems.
Some large integrated diamond manufacturers like Suashish Diamonds are tackling the situation through moderate inventories, but many small and medium-sized units may have to slash production. Gopal Laddha, CFO of Suashish Diamonds, said: "We plan our inventories according to the demand, so we have not suffered so far. However, many from the industry are having to
cut down manufacturing because there
is no demand, and the price of rough diamonds is also high."
While some primary diamond producers have agreed to lower the price of rough diamonds, others like DTC are yet to announce price cuts. The high price, along with expensive credit from banks to purchase rough diamonds, has been eroding the manufacturing profits.
Mehul Choksi, MD of Gitanjali Group that has a large retail network both in US and India, says that the lack of demand has brought down the prices by 35-50%. This is bound to come into effect soon. "Once the price of roughs decline, the manufacturing profits of Indian units would improve," he said.
According to data released by the Gem and Jewellery Export Promotion Council (GJEPC), between April and September imports of rough diamonds had grown 19% over the previous year's. This was largely due to the zero duty import structure, said Sanjay Kothari, former chairman of the council.
During the same period, exports of polished diamonds have grown despite the slowdown by nearly 22%. In value terms, the exports were to the tune of Rs 33,519 crore, due to higher price of diamonds. However, the exports will be slack till, feel traders.
Jewellery, though a low margin industry, accounts for nearly 20% of the total Indian exports and employs over a million people. With the economic situation becoming dire around the globe, most of the jewellery exporters who looked at tapping alternative markets in Middle East and Asia earlier, are now going slow.
Gold sparkles again
MUMBAI: Gold recovered some of its overnight losses in the domestic market on Wednesday as some investors shifted their funds to safe haven assets after a steep fall in equity prices. In international markets, yellow metal came under selling pressure as the dollar recovered some lost ground against the euro after Barack Obama won the US election and with hopes that change in the presidency would be positive for the economy. In Mumbai, pure and standard gold firmed up by Rs 125 and Rs 120 to Rs 11,810 and Rs 11,745 per 10 gm respectively. In London, spot gold fell to $745.60/747.00 an ounce from $763.20 in New York on Tuesday.
Some large integrated diamond manufacturers like Suashish Diamonds are tackling the situation through moderate inventories, but many small and medium-sized units may have to slash production. Gopal Laddha, CFO of Suashish Diamonds, said: "We plan our inventories according to the demand, so we have not suffered so far. However, many from the industry are having to
cut down manufacturing because there
is no demand, and the price of rough diamonds is also high."
While some primary diamond producers have agreed to lower the price of rough diamonds, others like DTC are yet to announce price cuts. The high price, along with expensive credit from banks to purchase rough diamonds, has been eroding the manufacturing profits.
Mehul Choksi, MD of Gitanjali Group that has a large retail network both in US and India, says that the lack of demand has brought down the prices by 35-50%. This is bound to come into effect soon. "Once the price of roughs decline, the manufacturing profits of Indian units would improve," he said.
According to data released by the Gem and Jewellery Export Promotion Council (GJEPC), between April and September imports of rough diamonds had grown 19% over the previous year's. This was largely due to the zero duty import structure, said Sanjay Kothari, former chairman of the council.
During the same period, exports of polished diamonds have grown despite the slowdown by nearly 22%. In value terms, the exports were to the tune of Rs 33,519 crore, due to higher price of diamonds. However, the exports will be slack till, feel traders.
Jewellery, though a low margin industry, accounts for nearly 20% of the total Indian exports and employs over a million people. With the economic situation becoming dire around the globe, most of the jewellery exporters who looked at tapping alternative markets in Middle East and Asia earlier, are now going slow.
Gold sparkles again
MUMBAI: Gold recovered some of its overnight losses in the domestic market on Wednesday as some investors shifted their funds to safe haven assets after a steep fall in equity prices. In international markets, yellow metal came under selling pressure as the dollar recovered some lost ground against the euro after Barack Obama won the US election and with hopes that change in the presidency would be positive for the economy. In Mumbai, pure and standard gold firmed up by Rs 125 and Rs 120 to Rs 11,810 and Rs 11,745 per 10 gm respectively. In London, spot gold fell to $745.60/747.00 an ounce from $763.20 in New York on Tuesday.
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