Interpreting export import numbers for rough and cut and polished diamonds - what they say about demand and supply in the market

These are the provisional export and import figures received from the Gems and Jewellery Export Promotion Council (GJEPC) for the month June 2009.

Import of rough diamonds

India imported rough diamonds worth Rs 4224 crores in June 2009 as compared to Rs 7483 crores last year in June, declining by nearly 44 percent.

This clearly corroborates what we have known all along, i.e. fewer manufacturers are buying rough and production of fresh goods has taken a hit which has resulted in a shortage of diamonds in the market. Also inventory levels for rough has come down drastically and manufacturers have almost exhausted their old stocks.

Import of cut and polished diamonds

Cut & Polished Diamonds worth Rs 3068 crores were imported in June 2009, as compared to Rs 2909 crores in June 2008, thus showing a growth of 5.44 percent.

This is surprising. If we combine this with the rough import numbers then it only means one thing; that thanks to the shortage of domestic goods, people have stepped up imports to meet the domestic requirements. Imports are usually expensive but in the current scenario where rough is very expensive, they are probably a better option.

Export of cut and polished diamonds

Total export of cut and polished diamonds stood at Rs 5061 crores in June 2009, while in June 2008 it was Rs 5248 crores. Cut and Polished diamonds exports declined by almost 4 percent.
We all know that the overseas markets are reeling and that is what explains the drop in cut and polished exports.

This is what the market watchers at TradersDiamonds feel about these export import numbers. What is your take on them?

Numbers courtesy GJEPC website Sphere: Related Content

The Jewellery Industry and the 2009 Union Budget

The following measures were announced by the Finance Minister, Mr. Pranab Mukherjee as part of the 2009 Union Budget. On behalf of the industry, we thank the Gem and Jewellery Export Promotion Council (GJEPC) whose efforts brought about these changes.

• Extension of interest subvention of 2 percent on rupee export credit beyond the current deadline of September 30, 2009 to March 31, 2010
• Abolition of Excise Duty on Branded Jewellery
• Abolition of Fringe Benefit Tax
• Exemption of Service Tax on services received by exporters from goods transport agents and commission agents, where the liability to pay service tax is ab initio on the exporter. No need for the exporter to first pay the tax and later claim refund.
• Service Tax exemption for other services received by exporters would be operated through the existing refund mechanism based on self-certification of the documents where such refund is below 0.25 percent of FOB value and certification of documents by a Chartered Accountant for value of refund exceeding the above limit.
• Service Tax exemption to all Export promotion Council’s and FIEO on the membership and other fees collected by them till March 31, 2010.
• Extension of sun-set clauses for the tax holiday (deduction in respect of export profits available under sections 10A and 10B of the Income-tax Act) by one more year i.e. for the financial year 2010-11.
• Increase in customs import duty on Gold Bars from INR 100/10 gm to INR 200/10 gm
• Increase in customs import duty on other forms of gold like Tola Bars, medallions and coins excluding jewellery from INR 250/10 gm to INR 500/10 gm
• Increase in customs import duty on silver excluding jewellery from INR 500/ kg to INR 1,000/ kg

Courtsey GJEPC Sphere: Related Content

Domestic consumption of diamonds double in last 3 months - time for gold jewellers to make the most of India's growing growing craving for diamonds

The Economic Times reports that India’s domestic diamond consumption has doubled from 2% of the total production to 4 % of the value in the course of the last 3 months.

The article attributes this growth spurt to the crash in diamond prices owing to the global economic recession. As a result of the crash, a lot of manufacturers resorted to desperation selling, leading to an almost 15% drop in prices. But that has been followed by an increase in prices owing to a severe shortage of goods. This shortage was caused by the lack of production (owing to unstable pricing) and high rough prices. The growth in consumption, therefore, has happened in spite of this price increase and that makes the increase in demand an even bigger story – for everyone involved in the diamond business in India.

The robust growth is something that every jeweller in India needs to take notice of. The ones who are already doing well in solitaires can pat themselves on the back; for being well positioned to harness the growth, while the ones who are not dealing in diamonds might as well get started before the boom passes them by.

I say solitaires and not just diamond jewellery because the report also mentions that there has been a significant increase in demand for expensive diamonds which are more than 1 carat in size. Diamonds are no longer just an embellishment for the gold jewellery. More and more customers are looking to buy solitaires and big ones too.

So what does it take for a gold jeweller to become a diamond jeweller too?

It takes an inventory of loose diamonds, solitaire designs, a display of pieces, a few artisans who are trained in solitaire setting and a sales force with good knowledge of diamonds.

A gold jeweller can get all of these under one roof at TradersDiamonds without having to spend too much.

With a crest of strong consumer demand to ride and a readymade solitaire solution on offer, has there ever been a better time to be in the business of selling diamond solitaires. Sphere: Related Content

News from the JCK show and how it bodes for the Diamond Industry overall

The JCK Show is the Diamond Industry’s premier buying event. It gives the industry players an opportunity to check out and buy products from across the world, observe the latest trends and hobnob with one another. The 2009 show was held at Las Vegas, and coming at a time when the industry is going through turbulent times, the show was the hottest topic of discussion amongst anyone even remotely connected with diamond industry.

Mithun Sacheti, a graduate jeweller gemmologist from GIA and an avid diamond industry watcher was at the JCK Show. He shared with us on how things turned out at the show and gave us insights on how the overall performance will impact industry dynamics in the near future.

Here are the important excerpts of our discussion

Demand, Supply and Prices

In rounds the strongest demand was for 5 carat and above D-IF goods. There is also massive demand for 10 carat goods but they have become extremely scarce and as a results price have shot up to price premium levels. In fancies, pears in 8 carats and above had the highest demand. But thanks to the demand, even these goods are facing a major shortage now.

In pointers, the prices of triple excellent goods are going through the roof – they have gone up by almost 20% in the last one month

Big Winners

In addition to the suppliers who had diamonds to offer at high discounts, the others who had a successful show were people with rare high quality goods. There was also a good market for unique products.

Big Losers

While unique and rare goods were selling well, generic jewellery suffered badly. The major reason for this was price – there was huge gulf in what buyers were willing to pay and what sellers were offering and hence very few deals materialized.

Global Trend

Asia continues to drive global demand in a big way. Mumbai and Hong Kong are generating most of the business worldwide. The Middle-east is also contributing – they have massive requirements for diamonds in very good and good cuts.

Overall the show was a moderate success and things are looking up. The feel good factor is slowly coming back and both buyers and suppliers are optimistic about the future outlook. Hopefully things should be back to normal fairly soon. Sphere: Related Content

The TradersDiamonds Market Update – 11/05/2009

GIA and GJEPC sign MOU to promote gemological education

In a wonderful development, The Gemological Institute of America (GIA) and the Gem and Jewellery Export Council (GJEPC) have decided to join hands to promote greater gemological education throughout India. They have signed a Memorandum of Understanding (MOU) to this effect and plan to build a solid foundation to raise the overall gemological education standards in India. They also believe that this effort will help to develop and retain talent in the industry.

The two bodies will work together to develop course content that will set standards and fulfill the education requirements for the Indian gem and jewllery industry. GIA India will introduce and conduct gemology courses at all GJEPC institutes, using well trained faculty able to speak English, Hindi and Gujarati. In addition GIA will admit GJEPC graduates to GIA for higher studies. In return, the GJEPC will actively promote the programmes, obtain the necessary clearances and permission to conduct the courses whenever required.

We at TradersDiamonds.com are extremely pleased with this development. We take every opportunity to educate our customers and have been striving for more informed diamond buying and selling in India. With GIA and GJEPC taking it upon themselves to do the same, our job became so much easier.

News from the Markets

New York

The New York market is picking up slowly. The orders are flowing in at a steady rate but demands are constantly rising. Overall, the demand is far slower than the rest of the world market

The best demand is in the Carat sizes 1.50 -2.00cts in better clarity. Demand for Fancy Cuts in 0.50 carats and above is also increasing.

Antwerp

The Belgium Diamond market is showing great improvement at the trading level. Traders are preferring to conduct more cash transactions because they are very concerned about their ability to collect their payments in the current market environment. But demand is rising steadily and the mood is positive

Demand has improved across the board for stones up to 3.00 carats.

Mumbai

Compared to recent weeks trading levels have shown a large improvement. Demand has been created by local requirements as well by the presence of overseas buyers. But the severe scarcity of goods has resulted in very few purchases.

The best demand is for rounds ranging from 1.00-2.00 carats in G-J colour and VS clarity. Sphere: Related Content

The TradersDiamonds Market Update – 13/04/2009

Market Updates are going to be a regular feature on the blog. We keep track of all the international happenings that impact the diamond trade and closely monitor trade activity across major markets. Doing this is extremely important for us as we are involved in a truly global business. Moreover, having a brokerage model, which works on thin margins, makes it imperative that we are always on our toes and react quickly to market changes. We believe that sharing the power of this information with our customers will help them gain a competitive advantage in the market place. So here we are with our first update. We are hoping to create a forum to facilitate two-way exchange of information and hence request your active involvement.

Basel World 2009

We will start with a review of BASELWORLD, which is the biggest luxury goods trade show in the world. The 2009 event saw 1,952 exhibitors from 45 countries showcasing their latest products and innovations. The eight day event which came to a close on 2nd of April once again reaffirmed itself as the leading global business platform for the watch and jewellery industry and gave a fresh lease of life to the various exhibitors.

Expectations were really low for the show this year in wake of the global economic recession. However, the show surpassed all those mediocre expectations. The event was bustling with activity and there was active participation from both buyers and sellers. Although, sales orders dropped down from last year, they were still far higher than waht most participants were expecting. Another measure fo the success was the significant increase in the number of international visitors.

The unexpected turnout and enthusiastic response has raised the morale of the entire jewellery industry. There is new hope and the show participants are forecasting a much better second half of the year. BASELWORLD truly managed to live up to its name once again.

The next year’s event will be held in Basel between 18 to 25th March.

News from the Markets

New York

The New York Market is slowly and steadily picking up. The unexpected success of the Basel show has created an optimistic outlook in the market. Interest in goods has increased and the trade is hopeful that a strong second and third quarter of 2009 will make up for the low numbers in the early part fo the year.

The biggest movement has ben seen for 0.05 to 0.15 cts, whose demand has really picked up. The other categories where demand has improved are the 0.50+ carat fancy cuts. The short supply for Carat sizes and larger in G-K / SI+ has helped in stabilizing the prices for these articles.


Antwerp

Trading has increased to decent levels at the Belgium diamond exchange. This market has also benefited from the positive energy of the Basel Show. Rough buyers who were absent for a long time have started making inquiries again although not much is happening in terms of actual sales as rough prices are still very high. In terms of demand, it is slowly picking itslef up across the board , with no category shoing significant movement.

Mumbai

A rise in local demand has put some life into the maket. So much so that some manufactures are contemplating going in for new production. A few overseas buyers have started making inquiries. Trade experts feel that these are optimistic signs for the market. The highest demand is for round in small parcels of 0.005-0.15 cts, F-J / SI and 80 pointers in F-J / VVS.


We hope that you found the update useful. We will continue to rpovide you with similar news and updates from around the World. Suggestions are welcome to make the update more informative. If you have any questions about diamonds or the diamond trade, then please feel free to ask us.

Thanks

The TradersDiamonds Team Sphere: Related Content