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Jul 30

LGD, natural diamond prices in India see steep decline leading to oversupply of diamonds


From the highs of $300 a carat in July 2022 to the lows of $78/carat this month, the lab-grown diamond market has seen a massive crash, raising questions over whether the sheen has worn off the sparkler. Natural diamonds too have seen a 25-30% correction in prices.


Diamantaires say the past two years have been tough with constant drop in prices and the stock losing value with each passing day. What didn't help was the rise in gold prices, the slump in US economy and other other western nations, and a sudden change in Chinese buying pattern.Diamond stock was seeing devaluation with every passing day, forcing enterprises to execute orders at a loss. Diamond rates have been falling for the past 22 months," said Ashok Gajera, CMD, Laxmi Diamonds.



In Feb this year, the import of rough diamonds from India shot up and the industry felt revival was in sight. However, its optimism was short-lived. Experts say that there is an oversupply of diamonds in India now.


Cheaper quality flawed diamonds have lost their mojo and are witnessing tough competition from flawless lab-grown stones. At the higher end, demand from the global market is slow. China, which used to be a large buyer of flawless mined stones, is suddenly not interested and its purchasing power is merely 10%-15% of what it was

According to Indian gems and jewellery sector's performance data, the overall gross exports of gems and jewellery during April-May this year amounted to $4,691.6 million (Rs 39,123 crore), a 5.9% decrease from the figure for the period last year. Cut and polished diamonds saw a decline of 15.5% to $2,627 million, and the provisional gross export of polished lab-grown diamonds too fell 15.5% to $204.2 million against $241.6 million for the period in 2023.

Even as the gems and jewellery sector commended the Centre for having reduced import duty from 15% to 6% in Budget 2024, Kanaya Kakad, director of India Bullion and Jewellery Association's governing board, said traders who hold stocks of gold will suffer losses in the short term - they had purchased at a higher rate but will now have to sell cheap.


source:TOI




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