Gemfields' launches RARE COLOURED GEMSTONES campaign

The campaign promotes the company's ethical mining practices

Post By : IJ News Service On 29 June 2012 7:00 PM
%%Main Trends %%Higher Wages Demanded Further Slowdown of US Economy Fears About Christmas Prospects Industry’s Labour Problem Agitation Precipitates Grave Crisis Stocks Pile Up, Money Tight Rough Prices Hiked Again Diamond Exports Presenting Different Picture Gold Jewellery Declines Bullion Firm %%The Indian diamond industry and trade are facing tough times at present. On the one hand, the overseas demand remains very slow in view of continuing weakness of the US economy and its uncertain growth prospects. Consequently, most diamond exporters are concerned about prospects for diamond business during the ensuing Christmas season in the USA which remains the largest consuming centre for diamond jewellery. To add to the woes of the diamond industry, prices of rough stones continue to rise.%%{{Higher Wages Demanded }}:%%Furthermore, the steep rise in inflation in the current year is forcing diamond cutters to demand and even agitate for higher wages. This had led to considerable disruption of manufacturing activity.%%{{Further Slowdown of US Economy}} :%%The US Federal Reserve Board Chairman – Ben Bernanke has expressed fears that the US economic growth might slow down further to about 1.2 per cent in the current year ending March 2009 from the earlier forecast of 1.3 per cent. On the other hand, inflation rate is expected to increase. In each of the first six months, there have been substantial job-losses in the USA as employers resort to retrenchment to bring down costs. However, those who lose jobs, lose their appetite for spending as well, thus hitting the manufacturing sector in turn. The index of US consumer confidence fell as low as 50.4 per cent last month.%%{{Fears About Christmas Prospects}} :%%Under this situation the diamond trade fears that the ensuing Christmas season in the USA may be a tame affair. In Japan, the second largest economy in the world, demand for diamond jewellery has slowed down. Of course, some other markets continue to buy but their share in the overall global diamond business is relatively small, and therefore they are unable to influence much the overall mood of the market.%%
{{Industry’s Labour Problem}} :%%Meanwhile, the labour problem in the diamond industry remained to be resolved. Agitation for this started in Surat, India’s largest diamond manufacturing centre. Diamond workers asked for a 30 per cent increase in wages. Ultimately, it was decided, as a result of discussions between representatives of the industry and workers that a wage hike of 20 per cent would be allowed. However, some factory owners contended that they could not afford such a hike in wages. Therefore diamond workers resorted to stone- throwing there.
{{Agitation Precipitates Grave Crisis :}}%%Even as agitation problem in Surat remained unresolved, it spread to other cutting centres like Ahmedabad, Bhavnagar, Amreli, Junagadh, Savarkundla, Jasdan etc. At Bhavnagar, a watchman at one of the factories, fired at agitating workers, killing one of them on the spot and injuring a few others. The tangled issue of wages remains to be settled. This has affected the industry’s manufacturing activity considerably.%%{{Stocks Pile Up, Money Tight :}}%%According to industry circles, whatever demand is there at present is concentrated on one carat up sizes. It is extremely difficult to sell small which so on inflating the inventories. Money conditions remain tight. The cost of borrowing from unofficia sources has gone up as high at 2.00 to 2.50 % per month.%%{{Rough Prices Hiked Again :}}%%To add to the worries of the diamond industry, prices of rough stones have again been pushed up by major suppliers. Though the overage hike in prices is said to be around 5 per cent, it appears to be as much as 25 per cent for some bigger sizes, 13 per cent for makeables, and 7 per cent for sawables. Alrosa is also said to have put up its prices by about 11 per cent. This price rise has unfortunately come at a time when the trade is facing tough times. Of course, there is demand for polished stones of 1 ct, 2 ct and still bigger sizes, but the necessary roughs to manufacture such bigger stones is in short supply. Smalls are neglected and their prices are down.%%{{Diamond Exports Presenting Different Picture :}}%%Provisional figures of shipments of cut and polished diamonds from the country in the first two months of 2008, however, present a different picture. According to these figures, shipments of polished diamonds during the period have been substantially higher at US$ 3,779.68 million (Rs. 1,502.18 crore) compared with US$ 2,871.22 million (Rs. 11,993.07 crore), showing a rise of 21.64 per cent in dollar and 28.43 per cent in rupees terms. In terms of caratage the increase has been of the order of 18.17 per cent at 101.61 lakh carats, against 85.99 lakh carats. If these shipment figures present a brighter picture it is said to be largely due to inclusion of intra-office movement and increased activity in imports of polished stones and their subsequent re-exports.%%{{Gold Jewellery Declines :}}%%Shipments of gold jewellery on the other hand, even according to the provisional statistics, are down, reflecting the real state of business. For the first two months of 2008-09 shipments of gold jewellery from the country are placed at US$ 1,149.65 million (Rs. 4,684.83 crore) against US$ 1,197.83 million (Rs. 5,003.32 crore) in the same period of the earlier year, showing a decline of 4.02 per cent in dollar terms and of 6.37 per cent in rupee terms. In view of inadequate overseas demand a number of gold jewellery manufacturing units have curtailed their production.%%{{Bullion Firm :}}%%In view of rising inflation, softening US dollar, and geo-political tensions investors seem turning to gold as a shield against inflation. Consequently, gold was placed in the international market as high as US$ 974.59 per oz. on July 16, 2008 and silver to US$ 19.02 per oz. On the same day, standard gold in the Indian market was traded at Rs. 13,560 per 10 grammes and silver at Rs. 25,890 per kg. The under current of the bullion market appeared firm.

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