Diamonds in demand; Surat acts tough

We publish courtesy of Mineweb

Author: Shivom Seth

On the back of some dismal news two days ago, there is some good news. The world’s biggest diamond cutting and polishing centre in Surat, Gujarat, has for the first time in two years, reported a massive increase of 57.63% in the export of cut and polished diamonds between April 2010 to October 2010.

For the past two years, the figures were on the downside because of the global recession.

The Gems and Jewellery Export Promotion Council said that about $14.82 billion worth of polished diamonds was exported, as compared to the $9.4 billion in the same period of the previous year.

During April-October 2010, exports and imports of cut and polished diamonds stood at Rs 679.8bn(US$15bn)  and Rs 440.8bn (US$9.72bn)e respectively, as compared to Rs 453.6bn (US$10bn) and Rs 273.9bn (US$6bn) respectively, during the corresponding period of the previous year.

In carat terms, exports have registered a 13.62% growth to 36.5 million carat from 32.1 million carat of last year.

In the month of October this year, the gems and jewellery exports grew by 31% to $2922.58 million, as compared to the corresponding period of last year.

“In October 2009, total exports had touched $2120.64 million”, said Daneshbhai Shah of the  Council. “Just recently, given the increasing demand of diamonds from the US and European markets, several Surat traders had implemented a 7-20% hike the prices of rough diamonds,” he added.

Dinesh Nawadia, president of the Surat Diamond Association said that there was a growing demand for roughs. A five-member delegation of Kimberley Process which visited Surat in Gujarat at the end of November, also noticed the pick-up in orders, and the subsequent price hike that was initiated by the traders, he added.

“The price hike in rough diamond is 5% to 15% and on average it’s seven to 10 percent,” said Chandrakant Sanghvi, the regional chairman of the  Export Council.

Cut and polished diamonds grab two-thirds of total gems and jewellery exports of the country so there is a solid demand for polished diamonds.
Gold jewellery exports during the first 10 months went up by 6% to Rs 254.5bn (US$5.6bn)  against Rs 240bn (US$5.3bn) in the corresponding period in 2009.

A couple of days ago, there was some grim news for the newly formed Surat Rough Diamond Sourcing India Limited (SRDSIL), a consortium of 1,500 diamantaires in Surat. The Kimberley Process Certification Scheme (KPSC) failed to break the international deadlock over Zimbabwe’s suspended diamond exports in the second consecutive meeting held at Brussels recently.

This meeting was in the wake of a KP plenary session held earlier this month in Israel.

That meeting, too, ended with no consensus on whether to allow rough diamond exports from the Marange diamond fields in Zimbabwe. The Zimbabwe Diamond Consortium (ZDC) and the SRDSIL had earlier signed a pact for the supply of $1.2 billion worth of rough diamonds mined at the Marange diamond fields in October.

But the pact could not see the light of the day, as the KP’s plenary meeting in Israel ended in a deadlock over the export of rough diamonds from Zimbabwe.

Two countries – Canada and Australia – still have reservations on Zimbabwe’s diamond export from the Marange diamond fields. India, however, is not a part of this cartel, and exporters insist that their economic considerations outweigh ethical ones.

Zimbabwe said recently it had mined 2.7 million carat of diamonds worth millions of dollars from Marange and that the country had additional stockpile of 4.7 million carat of rough diamonds.

Moreover, in a first ever judgment in the blood diamond case, the Gujarat district court convicted two foreign nationals — Robai Hussain of Guyana and Yusuf Ossely of Lebanon — to four years in jail, for bringing in illicit diamonds worth Rs 3.85 crore.

“Surat, in particular, and India, in general, have proved to the international watchdogs that we act tough when it comes to blood diamond trade,” said  Sanghavi. The culprits are behind bars and that is all that matters,” added Sanghavi.

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