At the time when global supplies of rough diamond is improving, the demand for gold jewellery globally has not yet picked up any momentum in the first four months of current calendar year due to the economic downturn that dramatically impacted demand for gold jewellery and rough diamonds.
Gold and rough diamonds are the major raw materials for the gem and jewellery sector. The Diamond Trading Company?s (DTC), marketing arm of DeBeers group and a major global supplier of rough diamonds, last week increased its supply of rough diamond in May 2009 sight by 25% higher which is more than the March/April 2009 sight estimate, but it is still 62% lower than one year ago. May 2009 sight held an estimated value of $250 million.
?It is definitely good news for our domestic market as we import rough diamond in large quantity from global market but there is no fresh buying from major buyers like USA and Hong Kong,? a leading sight-holder who did not wish to be quoted said.
?Demand for diamond jewellery has not yet picked up any momentum and the diamond industry is still stagnant under the pressure of the global economic slowdown,? he added.
Net US rough diamond imports in March totalled $8.31 million, averaging $1,242 per carat. The US imported a net of 6,689 carats of gem quality rough diamonds during the month, according to latest figures available. Compared to March 2008, net imports fell 58.9% in value and 32.4% in volume. Gross imports of 32,944 carats carried a declared value of $19.25 million, averaging $584.50 per carat. On year-on-year basis, gross imports declined 73.9% in volume and 69.2% in value.
?I believe there is good demand for roughs but it is scattered. The overall availability of roughs is less because DTC has cut production. There is stronger demand for 3 carats that yield polished stone of 1-1.5 carats,? said another sight-holder. In April, India?s rough imports decreased 41.91% to $557.98 million, while exports decreased 23% to $765.74 million.
?Demand has not grown much during the last month and it will continue to remain stagnant or low as far as gems and jewellery sector is concerned,?Rajesh Mehta, MD of Rajesh Exports told FE. He said downturn in this sector may continue for over the next three quarters. Gold import has also gone down substantially and it may remain stagnant.?
Among the major global players, Israel?s polished diamond exports fell 28% to $269.1 million in April 2009 while roughs export dropped 59% to $108.3 million in April 2009. Belgium?s rough imports also decreased 58% to $399 million, while exports decreased 37% to $609.8 million. Net rough imports (rough import less export) widened their deficit for the month to $210.8 million, from negative $21.2 million a year earlier.