Diamond miners globally have in the past two years produced more than they did previously, causing some erosion in the premium attached to the diamond. The total global rough diamond production of 150 million carat in the last two years is at a record high. However, eight leading global diamond mining companies are now planning to cut production by a third to ensure better value for the diamond.
Currently, prices of unpolished or rough diamonds are softening, said Jean-Marc Lieberherr, Chief Executive Officer of the Diamond Producers Association, a body of eight large miners including Al Rosa, Argyle and DeBeers. The eight companies collectively mine 75 per cent of the world's diamonds.
Fortunately, the US market is still vibrant, though not as strong as 2017 as the US dollar and equities are currently stealing the diamond's thunder.
India is the world’s largest diamond polishing destination with almost 85 per cent of the world’s diamonds being polished here. However, in an interview to Business Standard, Jean-Marc said, “ prices of polished diamonds in India has also remained soft and polishing units and companies are keeping inventories on a need basis and only to meet immediate demand.” They are very ‘cautious’ in replacing inventories, he added.
“Confidence is down ahead of elections when consumer demand for luxury assets like diamond-studded jewellery remains low.
However, “it is not disastrous as India has huge potential for expanding local sales. He said these sales could go up significantly from the current 6-7 per cent.
The Diamond Producers Association (DPA) has commissioned S&P Global to publish a research report on diamond mining. The report would quantify the benefits of diamond mining on ecology, economic and social life of the region. it is also going to launch a campaign to restore the reputation of diamonds and help Indian units identify synthetic diamonds. The DPA is working with Indian stakeholders in the industry including the Gem and Jewellery Export Promotion Council.
The Indian Gem and Jewellery sector has been hit by slow sales, a dearth of working capital after several high profile fraud cases last year.