Lab-GrownSep 20, 2023
Lab-Grown Diamond Outlook: Price Declines Aren’t a Deterrent SourcingSep 20, 2023
Natural Diamond Outlook: Indian Diamantaires Navigating Multiple Storms
Economic slowdowns, geopolitical tensions, and the rising popularity of lab-grown diamonds are clouding the outlook for mined diamonds.
Diamantaires in India currently face a number of challenges when it comes to natural diamonds, including a post-pandemic decline in consumer demand.
Mumbai—There are dark clouds hovering on the horizon as the Indian diamond industry prepares to enter the last few months of 2023 and look beyond to early 2024.
The clouds have been gathering for a while, the result of multiple smaller storms that have been brewing over the past year or so.
Major markets are seeing an economic slowdown, with the shadow of a possible global recession looming large.
Geopolitical alignments are changing, a factor that has gathered momentum following the start of the war in Ukraine.
These developments are having a big impact on global trade.
To top it off, there has been a sudden alteration in market dynamics within diamond jewelry retail, particularly in the United States, as lab-grown diamonds have made rapid inroads in the engagement ring segment.
Over the last 12 months, production of polished natural diamonds has slowed, dropping well below the levels seen last year.
Figures released by the Gem & Jewellery Export Promotion Council (GJEPC) show that between April and August 2023, i.e., the first five months of the Indian fiscal year 2023-2024, exports of polished diamonds have declined by 30 percent year-over-year in value terms, from $10.01 billion to $7.03 billion, and by 28 percent in volume terms, falling to 8 million carats from 11.1 million carats a year ago.
Sluggish Consumer Demand Worldwide
Ajesh Mehta of D. Navinchandra Exports, who is also convener of the Diamond Panel Committee of GJEPC, characterizes the downturn as being the result of “the vicious cycle of market forces.”
“Demand is sluggish across the world,” he explained. “The plateauing of the U.S. market was not entirely unexpected as the stimulus effect had ended and other categories of luxury experiences, like holidays, travel, etc., were once again available to consumers.”
However, the global slowdown has been deeper and wider than expected, he noted.
Diamond market analyst Pranay Narvekar of Pharos Beam Consulting said the no-show from Chinese consumers has hit the industry hardest.
“Indian diamantaires had high expectations after that market opened up in early 2023. Yet, as the year progressed, Chinese demand has remained stagnant. An important chunk of the global market has gone missing.”
GJEPC Executive Director Sabyasachi Ray believes manufacturers of small goods have been most impacted by the lack of demand from the Far East, which they had hoped would balance the end of the surge in demand from the U.S. market.
Additionally, there is another challenge the industry faces in what he characterizes as “mid-size goods,” diamonds between 0.70 and 2.5 carats. U.S. consumers have shown a preference this year for lab-grown diamonds in those sizes.
“India has a significant share in these sizes as well,” he said.
Impact Reaching Supply Side
As often happens, changes in supply patterns have lagged behind the drop in demand.
The inflow of rough diamonds has not slowed at the same pace as exports. In the first five months of this fiscal year, Indian imports have declined by 18 percent in value terms, from $7.9 billion to $6.4 billion, while remaining flat in volume terms.
Recent sales indicate that adjustments are now beginning on the supply side as well.
Observers believe that cutting and polishing of natural diamonds has been around 50 percent of capacity levels during the past year. However, unlike in previous downturns, this has not led to idle wheels and mass layoffs.
Most units have switched to cutting and polishing lab-grown products fairly seamlessly, along with some shortening the work week and cutting wages accordingly.
It is anticipated the traditional closure of diamond factories during the Diwali festival, which falls in mid-November this year, will be longer than usual.
Meanwhile, manufacturers’ stockpiles of polished diamonds are accumulating, even as prices have declined across most sizes.
Discussions With Miners
Against this backdrop, the Indian industry has reached out to major mining companies.
“After extensive consultations among diamantaires, we have communicated with miners and requested them to adjust their supply to market realities,” the GJEPC’s Ray said. “We are hopeful of a positive response so we can all ride out this difficult phase together.”
India’s domestic market provides another ray of hope.
Related stories will be right here …
Ajesh Mehta said, “The buzz at the [new loose] diamond show held as part of IIJS Premiere indicated that demand remains strong within the country, and the trade is looking towards Diwali and wedding sales to provide a boost.”
Prospects for China remain unclear, and the industry hopes that the Hong Kong show at the end of September will provide some hint over which way the winds are blowing, he added.
Depending on the outcomes in these markets, and the steps taken by mining companies, the industry will plan its next moves to balance the supply-demand equation.
The War in Ukraine
India also is gearing up to face new challenges after leaders of the Group of Seven (G7) announced they would be working together to tighten sanctions on Russian goods, including diamonds. The new sanctions reportedly will take effect Jan. 1.
Discussions have been going on at a government-to-government level and the exact details of the restrictions that will be implemented globally remain unclear at this point.
Many in the industry are hoping they will only apply to goods weighing 1 carat and above.
“In our discussions with U.S. officials, we have emphasized that tighter sanctions will hit the livelihoods of millions of artisans and their families,” GJEPC officials have said.
While individual companies with significant business in the U.S. already had initiated measures to ensure segregation within their pipeline following the initial sanctions imposed in 2022, preparations are on now for an industry-wide system.
Trade bodies are putting the finishing touches on a system for tracking all goods above a certain size as they move through the cutting and polishing process in India.
GJEPC officials said once this scheme is in place, an official body will be able to certify segregation of a large spectrum of polished, barring perhaps the very small sizes.
This will ensure sanctioned goods are not sent to G7 markets, they said.
Disruption has become part and parcel of every business today, spurred by a combination of factors ranging from new technologies to political alignments to consumer sentiment.
A senior member of the industry recently averred, “The natural mined diamond manufacturing industry in India appears to be going through such a churning today.”
More on Sourcing
The Latest
MajorsAug 26, 2024
Longtime Industry Sales Trainer Lenny Zell Dies at 97Said to be the first to write a jewelry sales manual for the industry, Zell is remembered for his zest for life.
WatchesAug 26, 2024
IWC Is Sending Its Watches to SpaceThe company outfitted the Polaris Dawn spaceflight crew with watches that will later be auctioned off to benefit St. Jude’s.
AuctionsAug 23, 2024
Abernethy Pearl Tops Estimates at Auction A buyer paid more than $100,000 for the gemstone known as “Little Willie,” setting a new auction record for a Scottish freshwater pearl.
Brought to you by
Watch: Natural Diamonds: A Great (but Often Untold) Geology StorySupplier Spotlight Sponsored by GIA.
CollectionsAug 23, 2024
Piece of the Week: Gumuchian’s Colorful ‘Spectrum’ NecklaceAnita Gumuchian created the 18-karat yellow gold necklace using 189 carats of colored gemstones she spent the last 40 years collecting.
Weekly QuizAug 23, 2024
This Week’s QuizTest your jewelry news knowledge by answering these questions.
TrendsAug 22, 2024
Kaley Cuoco Has a Three-Stone Engagement Ring With a TwistThe three-stone ring was designed by Shahla Karimi Jewelry and represents Cuoco, her fiancé Tom Pelphrey, and their child.
CollectionsAug 22, 2024
Greenwich St. Jewelers Collabs with TikTok Jewelry Content CreatorThe Manhattan jewelry store has partnered with Xarissa B. of Jewel Boxing on a necklace capsule collection.
Brought to you by
Watch: Forging the Next Generation of Skilled Bench Jewelers at GIASupplier Spotlight Sponsored by GIA
TechnologyAug 21, 2024
Instagram’s Notes Feature Expands to Posts, ReelsActing as temporary virtual Post-it notes, Notes are designed to help strengthen mutual connections, not reach new audiences.
TrendsAug 21, 2024
Carol Woolton To Release New BookThe jewelry historian discusses the history and cultural significance of jewelry throughout time and across the globe.
TrendsAug 21, 2024
Amanda’s Style File: Shimmy and ShakeFrom fringe and tassels to pieces that give the illusion they are in motion, jewelry with movement is trending.
IndependentsAug 20, 2024
Mixed-Media Jewelry Artist Jan Yager Dies at 72The designer and maker found community around her Philadelphia studio and creative inspiration on the sidewalks below it.
ColumnistsAug 20, 2024
Google Ads Payment Policy Change: What It Means For YouThe change to accepted payment methods for Google Ads might seem like an irritation but actually is an opportunity, Emmanuel Raheb writes.
IndependentsAug 20, 2024
Pat Henneberry Releases MemoirThe industry consultant’s new book focuses on what she learned as an athlete recovering from a broken back.
Events & AwardsAug 20, 2024
The Ethical Gem Fair Is Going to CaliforniaThe fair will take place on the West Coast for the first time, hosted by Altana Fine Jewelry in Oakland, California.
MajorsAug 20, 2024
Kathy Hillelson Joins Board of WJA Foundation Hillelson is a second-generation diamantaire and CEO of Owl Financial Group.
Events & AwardsAug 19, 2024
Nominations Are Open for the 2025 Gem AwardsSubmissions in the categories of Jewelry Design, Media Excellence, and Retail Excellence will be accepted through this Friday, Aug. 23.
AuctionsAug 19, 2024
Scotland’s Famed Abernethy Pearl Is Up for Sale Known as “Little Willie,” it’s the largest freshwater pearl found in recent history in Scotland and is notable for its shape and color.
IndependentsAug 19, 2024
Kentucky Jeweler Closing After 89 YearsClements Jewelers in Madisonville cited competition from larger retailers and online sellers as the driving factor.
CrimeAug 16, 2024
Jewels Stolen During Green Vault Heist Back on DisplayMost of the 18th century royal jewelry taken from the Green Vault Museum in Dresden, Germany, in 2019 went back on display this week.
IndependentsAug 16, 2024
Louis Anthony Jewelers Announces First Resort StoreThe Pittsburgh jeweler has opened a store in the nearby Nemacolin resort.
CollectionsAug 16, 2024
Piece of the Week: Jonne Amaya’s ‘Cat Claw’ NecklaceWith a 40-carat cabochon emerald, this necklace is as powerful and elegant as a cat.
Events & AwardsAug 16, 2024
IJO Names Jewel-Craft as VIP Vendor of the YearThe Erlanger, Kentucky-based company was recognized for its reliability when it comes to repairs and fast turnaround times.
SourcingAug 15, 2024
Greenland Ruby Is Up For SaleUnable to pay its debts, the ruby and sapphire miner is looking to restructure and become a “competitive and attractive” company.
TrendsAug 15, 2024
Paola De Luca to Debut Trendbook 2026+ at VicenzaoroThe trend forecaster’s latest guide has intel on upcoming trends in the jewelry market.
Events & AwardsAug 15, 2024
Heather Ingraham Awarded WJA Helene Fortunoff Scholarship Ingraham said she’ll use the scholarship funds to attend the Women’s Leadership Program at the Yale School of Management.
IndependentsAug 15, 2024
DC Jeweler Schools Students About Jewelry Via Summer ProgramMoijey Fine Jewelry & Diamonds held a three-week “Mine to Finger 3D Jewelry Program.”
