SURAT: On one hand, the diamond industry is elated over the development with regard to a new diamond bourse but on the other, small and medium diamantaires have no respite from the increasing prices of rough diamonds.
De Beers, the world's biggest diamond mining company, plans to raise diamond prices by 5 per cent every year in a phased manner. This means diamantaires could no longer hope for diamond prices to come down, even when the demand for polished diamond is high or average across the world.
The decision has come when the Indian diamond industry is buoyed by the increase in the demand for polished diamonds from the US, Hong Kong, China, UAE and other diamond consuming nations.
As per the official statistics by the Gems and Jewellery Export Promotion Council (GJEPC), India's polished diamond export increased by 25.47 per cent at Rs 1,18,870 crore in 2013-14 compared to previous year. The growth in polished diamond exports was witnessed after September 2013 and the trend is still continuing.
Sources said De Beers rough diamond prices gained about 10 per cent in 2013 after more than doubling in the past five years as the US economy recovered from the global financial crisis and China's burgeoning middle class bought more gems. The Anglo American, which owns 85 per cent of De Beers, wants its units to deliver a 15 per cent return on capital by 2016.
Last year, diamonds made up about 19 per cent of Anglo American's $33 billion sales.
Industry sources said the US market, which accounts for 37 per cent in the diamond jewellery segment of the world, is forecast to gain in 'high single digits in 2014, while there is a good momentum in the Chinese market as well. India is also expected to revive this year after a collapse in the Rupee, which dented the sales of diamond jewellery in 2013.
Diamantaires said De Beers has already raised rough diamond prices by 5 per cent at the start of this year and further increases are unlikely.
"One way it is good for the industry that De Beers will raise diamond prices by 5 per cent every year. On the flip side, it is not a good sign for small and medium diamantaires in India, who are riding high on increased demand for polished diamonds and stronger rupee against the dollar," said a DTC sightholder.