Di­a­monds Re­cover from Rough DeMo Ride

Price rises by 2% as sit­u­a­tion im­proves from note ban days when in­dus­try faced cash crunch

The Economic Times - - Finance & Commodities - Su­tanuka.Ghosal @times­group.com

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.

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