|
|
|
Fall in demand & high prices, diamond industry losing its sparkle
|
|
|
|
Top Stories |
|
|
|
|
IANS | 25 Jul, 2022
Fall in demand and rising prices of roughs is taking the sparkle out of
the diamond industry, said credit rating agency CRISIL Ratings Limited.
In a report issued on Monday CRISIL Ratings said the
revenue of the Indian diamond industry is set to be cut 15-20 per cent
to $19-20 billion this fiscal, compared with a decadal high last fiscal,
following a double blow from falling demand and rising prices of roughs
across the globe.
According to CRISIL Ratings, the Covid-19
surge and lockdowns in China-a major consumer of Indian polished
diamonds- is one of the huge demand dampeners
"Additionally,
inflation and opening up of other avenues of discretionary spending,
such as travel and hospitality, will dampen demand growth in the US and
Europe in the near term," the report said.
As for prices, the US
sanctions on Russian diamond mining company Alrosa following the
invasion of Ukraine has cut supplies of rough diamonds by almost 30 per
cent.
The state-owned company is the largest diamond producer in
the world and the supply constraint will continue amid sanctions on
Russia.
Also, key buyers in the US and EU have been insisting on
certificates of origin. As a result, the prices of roughs have shot up
almost 30 per cent since the start of this fiscal.
"While
volatility in rough diamond prices is typically passed on to the
polished diamond prices -- albeit with a lag due to the long operating
cycle in the trade -- tepid demand has kept polished prices from fully
catching up with rough prices this time around. This could squeeze the
operating profitability of Indian diamond polishers by 75-100 basis
points to 4-4.25 per cent this fiscal. Accordingly, interest coverage
may weaken marginally," Subodh Rai, Chief Ratings Officer said.
Further there is also a shift in consumer preference towards lab-grown diamonds which are cheaper.
"The
increasing prices and short supply of natural diamonds has also meant a
growing shift in consumer interest towards lab-grown diamonds, which
resemble natural diamonds and are 50-60 per cent cheaper to boot,
offering growth opportunities in a price sensitive market. The market
share of lab-grown diamonds is estimated to have expanded to about 8 per
cent presently from less than 3 per cent two years ago," Rahul Guha,
Director said.
|
|
|
|
|
|
|
|
|
|
|
|
|
Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
|
64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
|
|
Daily Poll |
|
|
PM Modi's recent US visit to redefine India-US bilateral relations |
|
|
|
|
|
Commented Stories |
|
|
|
|
|
|
|
|