India’s diamond trade is facing a shortage of rough diamonds worth $350-500 million ahead of the upcoming holiday season sales in the overseas markets, said industry executives. Miners attributed the supply shortage to the Covid-19, which, they said, forced them to curtail operations at the mines.
The shortage comes at a time when domestic diamond exporters were looking forward to the holiday season since the recently concluded jewellery show at Las Vegas signalled good demand.
“The demand is very strong from the US and China. Even European nations are showing a revival in demand,” Vipul Shah, vice chairman, Gem & Jewellery Export Promotion Council, told ET. “Our only concern is the steady supply of rough diamonds. At present, there is a shortage of supply. But that is also helping to hold the prices of both rough and polished diamonds.”
India’s gross exports of cut and polished diamonds surged 214% yearon-year in April-July to $8,522.34 million from $2,720.12 million.
Despite the second Covid-19 wave reducing production capacity, exports of polished diamonds and jewellery continued. However, as the situation on the ground improved, all of a sudden there was an acute shortage of rough diamonds, leading to a sharp increase in rough diamond prices in May. The demand-supply mismatch worsened when major miners supplied less rough diamonds due to slowing down of production on account of the pandemic.
The 45-day turnaround time in the Mumbai and Surat facilities of Gemological Institute of America in April and May created some shortage of cut and polished diamonds, which led to delays in execution of orders.