Signficant Increase In Demand For Rough Diamonds
8/31/2010 3:51:06 AM Simona Kogan
The demand for rough diamonds is rising at a fast pace, up significantly from the 2008-2009 season. Because of the significant increase in demand, prices are going up, too.
Prices have gone up almost 15 to 20 percent from pre-recession levels. Sales worldwide in places like the United States and China have all increased, says The Times of India. Producers like De Beers cut output and rebuilt their stockpiles.
Dealers in Antwerp and Dubai have increased their diamond prices by approximately 3 percent in anticipation for diamonds from a key diamond producing location in Surat, India in time for the holiday season coming up in a couple months.
India's diamond trade in 2010 has already passed 2008 levels of the same time frame, according to data from the Gems and Jewelry Export Promotion Council (GJEPC).
According to The Hindu Business Line, the demand for rough diamonds faced a sharp decline in 2008-2009 but have since increased month to month for most of 2009-2010.
Dinesh Navadia, President of the Surat Diamond Association (SDA) said that the recession has taught diamond manufacturers that they shouldn't hold too many rough diamonds in their inventory because overproduction hurts their business.
The ICRA, a credit rating agency, reveals a report that counters that, saying that there's been a significant increase because of efforts by mining companies to push supply cutbacks.
To continue positive efforts in the rough diamond industry, the Surat diamond industry, which according to The Economic Times, is responsible for 9 out of 11 diamonds in the world, has 500 units (of 4,500) that would like to form a company to source rough gems and stones from mines in Africa, Russian, Australia and Canada. This newly formed Surat Diamond Sourcing India Ltd (SDSIL) company would challenge companies like De Beers, Alosa, and Rio Tinto.
Vice-president of Southern Gujarat Chamber of Commerce & Industry (SGCCI) Rohit Mehta said, "SDSIL would sell diamonds at the highest price and offer the benefit to the shareholders."
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