SURAT: Diamond prices have witnessed a biggest ever fall in the first half of 2019 ending July. According to the price list published by the Rapet, world’s largest business to business online selling platform run by the Rapaport Group, the polished diamond prices from January to July recorded a fall of 13%. Diamond market sentiment was weak in June due to sluggish demand and tightening of manufacturing profits. Merchants in Surat and Mumbai are reducing prices to raise liquidity, as they’re under pressure from banks to repay their loans. The US-based Rapaport group stated the diamond industry’s challenges extend well beyond the slump in prices. There’s not enough profit in the midstream. De Beers’ June rough-price cuts were not enough to reboot trading, and cutters are not seeing value in their rough purchases. Industry sources said that the Indian banks have been pressurising the diamond firm owners to settle their outstanding accounts and that there is almost 50% cut in the credits extended to the companies. However, diamond manufacturers in Surat have reduced polished production by 30% to restore the market balance. Cutters are also shifting to smaller and lower-cost items to keep workers occupied. The result is that production of 0.25- to 0.50-carat diamonds remains steady, even though sales are slow and prices continue to soften. Surat Diamond Association president, Babu Gujarati said, “The diamond market is in the recession mode. The production of polished diamonds has been at the lowest level in July, compared to a year ago. The manufacturers are compelled to sell diamonds at discounted rates.” Aniruddha Lidbide, diamond industry analyst said, “The sheen of diamond industry has gone for now. The polished diamond market is at god’s mercy as the prices have decreased to almost 25% for the diamond sizes ranging between 0.30 carat to 1 carat.”
A price list published by Rapet , the online magazine for Rapaport Group , showed a 13 % decline in polished diamond prices since 2010 . Banks in Surat and Mumbai are lowering prices to reduce cash flow and sources have suggested Indian banks are tightening credit extended to diamond firms . Cutters in Surat have decreased the production of polished stones by 30 % and are turning to smaller stones . Babu Gujarati , the president of Surat Diamond Association , said the diamond market is in a decline and the polished diamond market has decreased to 25 % for diamonds between 0.03 and 1 carat .