In a joint communication to members of the diamond industry, Vipul Shah, Chairman of the Gem & Jewellery Export Promotion Council (GJEPC), and Anoop Mehta, President of Bharat Diamond Bourse, outlined the current state of the diamond market. The letter highlights both the challenges faced in recent months and the signs of recovery. It addresses market adjustments following the pandemic and looks ahead to a potential stabilisation of prices and is posted in full below:
Date : 5th September 2024
Dear Trade Members,
We write to you at a critical moment for the diamond industry. After a post-pandemic surge in natural diamond demand that led to record-high prices, we’ve faced a challenging correction period with prices correcting at wholesale level over the last 18 months as the abnormal surge we witnessed subsided and we all shifted through our inventory kept in line with the unusual demand we experienced post covid. Now, the industry is at a turning point, driven by several positive dynamics. We urge everyone in the industry to recognize the clear signs of recovery and price stability moving forward.
We acknowledge the pressures that have caused recent price adjustments, but several key indicators suggest positive outlook and confidence in natural diamond pricing:
- Reduced Polished Inventory: Significant reductions in polished diamond inventories across markets indicate supply is now more aligned with demand, providing a basis for price stabilization.
- Limited Rough Diamond Inflow: A decrease in rough diamond supply suggests that new polished diamond production will remain limited, reducing the risk of oversupply.
- Reduction in Manufacturing Capacities and Industry Debt: Industry players have responsibly managed slower demand and higher interest costs by optimizing manufacturing capacities and achieving the lowest bank debt levels in decades.
- Strong August Sales: August sales figures have been robust, reflecting increased consumer confidence and positive market momentum.
- Price Increases in Shortage Segments: Price rises in certain segments indicate a positive shift in market sentiment and a path toward stability.
- While India remains a growing market with increasing consumer spending, the U.S. market is showing consistent demand for natural diamonds despite recent challenges. Tenoris’ report is suggesting a better July and some interest shifting to Natural Diamonds at retail in the USA. The upcoming festive season is expected to have good sales.
- The Gem & Jewellery Export Promotion Council (GJEPC) is consistently working towards enhancing the Indian diamond industry by promoting natural diamonds and diamond jewellery. The strategy includes extensive retailer training to improve marketing skills, along with various promotional activities to boost consumer interest. Additionally, GJEPC seeks partnerships with miners and trade bodies to expand market reach and increase demand in key Asian markets.
These positive indicators offer a unique opportunity to reinforce confidence in our beautiful and valuable natural diamonds.
We call on our colleagues, partners, and fellow trade members to recognize these signs of recovery and move forward with positivity and confidence. Let us uphold the value of our rare and precious product and work together toward a more prosperous future for the diamond industry.
With respect and optimism,
Vipul Shah
Chairman
GJEPC
Anoop Mehta
President
Bharat Diamond Bourse
