Diamond industry also won?t be spared by the global financial turmoil and the ensuing demand slowdown. According to minister of state for commerce and power Jairam Ramesh, problems associated with the international settlements of monetary transfers among banks and the general tightening of available credit facilities would impact the diamond business and the flow of goods.
Inaugurating the sixth plenary of the Kimberley Process Certification Scheme, Ramesh said the sector would soon be hit by payment settlement contingencies, cancellations of transactions and diversions of rough traffic from one market to another market.
Currently chaired by India, KPCS is a global initiative by governments, industry and civil society to certify that shipments of rough diamonds are free from ?conflict diamonds??rough diamonds used by rebel movements to finance wars against legitimate governments.
He said in October some major primary producers have reduced selling prices of most of their rough assortments by between 35 and 50%, adding it has to be seen whether this steep reduction represents a technical correction, a temporary phenomenon, or whether it actually signals a trend.
The minister warned that in the next year or two the world would see tremendous volatility in rough diamond prices.