Price Hike Untimely:
The hike in prices of rough diamonds effected by DTC, cannot according to trade circles, be justified at the present juncture when the manufacturing industry was operating its capacity only partially in view of the vacation period, when diamond cutters generally return to their villages. Besides, the overseas demand for cut and polished diamonds also remains subdued.
Uncertainties Prevail:
Most of the manufacturing units, which were more or less idle at present, were expected to resume their activity by mid-June. However, some overseas markets might then be having their vacation period. The mood of the overseas markets could, therefore, be correctly ascertained only after that period.
Polished Gems Under Pressure:
Meanwhile, prices of certain varieties of polished diamonds are also under pressure. In certain categories the decline is said to be quite substantial. Moreover, despite the reduction of manufacturing activity, some units were said to be nursing substantial unsold stocks in view of weak overseas demand. Stars and melees are said to be quite subdued at present.
Hong Kong Market Slow:
The market in Hong Kong is reported to have considerably slowed down. Normally Hong Kong firms import large quantities of polished diamonds to meet the requirements of China's jewellery manufacturers. Currently, this activity has sloweddown.
Banks Burden Heavy:
Some recent reports in the media stating that certain firms were facing problems in meeting their commitments to their banks are also causing concern to trade circles. According to some estimates, aggregate banking exposure to the gems and jewellery industry and trade is placed around Rs. 65,000 crore. If banks try to reduce their support to this sector that may create additional problems for the trade which is already facing subdued market conditions. Interest rates on loans from non-banking sources are currently placed around 18 to 24 per cent per annum.
Diamond Exports Down:
Overall exports of polished diamonds from the country in 2012-13 totalled US$ 17,418.23 million (Rs. 96,675.12 crore), compared with US$ 23,318.94 million (Rs. 1,10,926.77 crore) in the preceding year. This indicated a decline of 25.30 per cent in dollars and 14.65 per cent in rupees, which rendered conditions mostly difficult in 2012-13.
Rough Imports Shrink:
Imports of rough diamonds in 2012-13 were worth US$ 14,893.23 million (Rs. 80,810.10 crore), compared with US$ 15,145.28 million (Rs. 72,221.89 crore) in the preceding year.
Gold Jewellery Upbeat:
Gold Jewellery exports from the country in 2012-13 totalled US$ 18,285.86 million (Rs. 99,852.63 crore), compared with US$ 2,265.76 million (Rs. 10,838.34 crore) in the preceding year. This showed that gold jewellery export in 2012-13 rose 8.94 per cent in dollar terms, compared with the preceding year.
Optimistic Prospects:
The Gems& Jewellery Export Promotion Council remains, however, optimistic about prospects for gems and jewellery exports in 2013-14. Its Chairman Vipul Shah has recently stated that exports of gems and jewellery in 2013-14 might show a growth of 12-15 per cent over the earlier year. He has expressed the hope that the US and Japanese markets might bounce back with an estimated growth of five per cent, while China is expected to maintain 10 per cent growth.
Bullion Weak:
Gold and U.S. dollar normally move in the opposite directions. As the U.S. dollar has been gaining strength for quite sometime, precious metals are seen retreating hitting gold bugs very badly. As the U.S.dollar strengthened to a six-week high, by mid May 2013, spot gold prices in the overseas markets fell to about US$ 1,414.38 per ounce. Likewise, silver also moved down to US$ 22.97 per ounce. In the inland market standard gold was placed around Rs. 26,700 per 10 grammes, while silver was traded around Rs. 44,695 per kg. The undertone of the market seemed shaky.
Follow DiamondWorld on Instagram: @diamondworldnet
Follow DiamondWorld on Twitter: @diamondworldnet
Follow DiamondWorld on Facebook: @diamondworldnet
