India, the world’s largest diamond cutting and polishing centre, is planning to reopen imports of rough stones in a limited way from July after imposing a temporary halt this month, a senior industry official said.
Dinesh Navadiya, president of Surat Diamond Association, India”s main centre for cutting, polishing and re-export of diamonds, told indoasiancommodities.com that the industry was planning to open up imports of rough diamonds between July 1-9.
The cutting and polishing hub in the western Indian state of Gujarat reopened earlier this month after an over two-month nationwide lockdown was eased, but the resumption of work has been far from smooth as a fresh rash of infections recently have now forced factories to shut shop for about a week.
The Indian industry had decided to halt imports of roughs till the end of this month because of an inventory pile up during the period of lockdown. India imports rough diamonds from South Africa, Russia and other countries.
Collin Shah, chairman of India’s Gems and Jewellery Export Promotion Council (GJEPC), said a final decision on resuming imports of rough diamonds is likely to be taken only in a day or two.
He said up to a quarter of the diamond cutting and polishing centres had resumed operations in Surat, though export demand was feeble from the main consumption centres traditionally in Europe and the US
“China is our best market currently,” he said. The global market for polished diamonds is dominated by the US and China, out of which the former usually accounts for about half and the latter about 15% of the total demand.
Export revenues from India’s gem and jewellery in the April-June quarter are likely to be worth about a billion dollars, though a bulk of this has been generated only in the last couple of months, Shah said.
India sales seen falling sharply
Flights carrying the precious cargo to key destinations have resumed though are available only once a week. International passenger flights to and from India are yet to resume, except certain special operations carried out to help Indian citizens stranded in other countries and likewise for foreign nationals in India.
Ratings agency Moody’s have forecast that India’s polished diamond sales could decline by as much as 39% to about $13 billion in the financial year ending March 2021. The nation’s polished diamond sales fell by about 21% in the last fiscal year ended March to $19 billion.
Demand for rough diamonds will remain subdued for some time from Indian cutters because of their inventories. Exports of polished diamonds and imports of rough diamonds in March had fallen by 79% and 48% respectively.
Even with the lockdown restrictions being gradually eased globally, it will take at least three to five months to get back to normal, barring any second wave of the dreaded Covid infections, says Moody’s.
Chow Tai Fook, the world’s largest jewellery chain by revenue, temporarily closed about 80% of its stores in mainland China and all its shops in Hong Kong in late January and February. Since then it has resumed operations.
However, retail jewellery sales in the US which has emerged as the worst Covid-hit country, have suffered due to low footfalls at malls amid stay at home orders to prevent the surge of virus infections.
US demand is unlikely to improve between the July-September quarter.
Local Indian jewellery demand has also suffered amid the pandemic with most jewellery stores functioning with about a quarter of their staff.