Wednesday, August 21, 2013

Rupee slide to hit polished diamond production

World's biggest diamond cutting and polishing centre is faced with the possibility of a drastic decrease in its polished diamond production ahead of Diwali. The production is expected to come down by 20 to 25 per cent ahead of the festival.

Diamantaires in the unorganized sector, mainly small and medium unit owners are finding it tough to buy high priced rough diamonds owing to the continuing slide of rupee against the dollar.

President of Surat Diamond Association (SDA) Dinesh Navadia told TOI, "Diamond manufacturers have a responsibility towards their workers to keep the units operating with sufficient output. But the small and medium factories are refusing rough purchase due to the price uptrend and the record fall of the rupee."

Navadia added, "This time around, the rupee downfall has shattered the Diwali hopes of the small and medium diamantaires."

Industry experts said the small and medium diamantaires contribute around 40 per cent of the total polished diamond output pegged at Rs 80,000 crore per annum. Diamond mining companies have been quick to respond to increasing prices and are reluctant to reduce the prices.

In the recently concluded Rapaport International Diamond Conference (IDC), chairman of Rapaport group Martin Rapaport asked the manufacturers to refrain from buying high priced diamonds to cope with the current market situation.

"Miners are raising prices and rough diamond is ahead of the polished one. So why manufacture diamonds when it is so hard to make money?" asked Rapaport.

A DTC sight holder said, "The diamond companies are facing heavy pressure for selling polished diamonds in the domestic market. The diamond consumers are reluctant to pay the high price due to the fall in the rupee against the dollar. This year's diamond jewellery sale on Diwali is likely to remain on the lower side."

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