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Small rough diamonds making a recovery as mfrs. seek low-cost goods

The market for small rough diamonds is making a recovery as manufacturers seek low-cost goods to keep their factories running during the downturn.

Demand for rough under 0.75 carats has outperformed the rest of the sector since India returned from its summer break last month Rough prices have plunged in the past three months, but those of smalls have seen a gentler decline and have even increased in the last four weeks, said Anoop Mehta, president of Mumbai’s Bharat Diamond Bourse (BDB) and CMD- Mohit Diamonds.“People need to keep the factories running at least at 50% to 55%,” Mehta said “In the smalls, if you let your workers go, they don’t come back. They will go and join some other business, like textiles and agriculture.”

It’s a matter of debate whether end demand is sufficient to justify this rush to the smalls. Manufacturers are being careful to avoid an accumulation of unwanted inventory, insisted Vipul Shah, chairman of India’s Gem & Jewellery Export Promotion Council (GJEPC). Polished from 0.33 carats and up is slow, he noted. “Whatever they’re selling, that is exactly what they’re trying to keep the factory rolling [with],” said Vipul Shah India’s diamond exporters are bracing for a difficult year as demand from their main markets — the US and China — remains weak following economic slowdowns.

The immediate demand for cheaper polished under 0.20 carats is from jewellery factories in Far East locations such as Malaysia, Indonesia and the Philippines, observed Anoop Mehta These units mount the stones into low-value merchandise destined for the US, Asian and Middle East consumer markets, where some demand exists, he explained.


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