Surat’s diamond businesses offer large discounts over worries diamond prices may continue to fall

By

Isabelle Crossley

Published
Jul 8, 2019

Diamond businesses in Surat fear that diamond prices will continue to fall and are offering between five and 10 percent discounts in the hope of offloading stock.

As diamond prices have fallen by over 20 percent in the past year, Surat’s diamond businesses are hoping to cut their losses, TNN reported. Traders of the precious gems in both the Mahidharpura and Varachha diamond markets are seeing large discounts as prices are expected to only continue to fall in the coming months.

Sources told TNN that there is more supply than demand for 0.25 to 0.5 carat diamonds which is part of the reason for the drop in prices. The industry’s production has also dipped by 40 percent compared to last year.

“The industry is facing difficulty in generating profits,” diamond exporter Kirti Shah told TNN. “Most of the manufacturers and merchants fear that if prices drop further, they would lose out on profit margins. For that, many are shifting to synthetics, where they’re finding better margins in both manufacturing and retail.”

The Surat Diamond Association had reported dropping prices in June and cited increased raw materials prices as one of the reasons for the industry’s struggles. Other contributing factors have included a reduction in the willingness of banks to lend to the sector and growth in the lab-grown diamond industry.