Diamonds Recover from Rough DeMo Ride
Price rises by 2% as situation improves from note ban days when industry faced cash crunch
Kolkata: The price of rough diamonds has increased by 2% in the last two weeks, aided by better currency flow that has pushed up demand from small units in Saurashtra and Surat.
More than 80% of the world’s diamonds are polished in India where the trade had taken a hit after the government said in November it was scrapping highdenomination currency notes. As ATMs started running dry, small diamond traders, who pay in cash, found it difficult to avail of polishing service.
“Situation has impro- ved since November, when demonetisation was announced. Smaller units in Surat and Saurashtra, which deal only in cash, are opening up. This has resulted in
demand for rough diamonds going up and prices moving up by 2%,” said Dinesh Navadia, president of Surat Diamond Association (SDA).
According to the Rapaport report for February, po- lished supply is projected to rise in the first quarter following a spike in demand for rough diamonds.
Meanwhile, sellers of polished diamonds, who had closed 2016 with a low inventory on account of falling demand, are ramping up operations to meet an expected rise in polished trading.
Vipul Shah, former chairman of Gem & Jewellery Export Promotion Council (GJEPC), said prices of polished diamonds should move up in tandem with prices of rough pieces. “Otherwise, cost of production will go up for diamond manufacturing companies,” he said. Industry executives said mining companies are preparing for higher demand for rough diamonds this year.