Surat: small diamond prices down 15 percent

By

Isabelle Crossley

Published
Jun 10, 2019

Small diamond traders in Surat have seen prices fall by almost 15 percent over the past year as rough diamond prices have risen leading to a fall in profit for many traders.

Surat’s small diamond traders are under pressure with decreasing prices and increasing raw materials costs, TNN reported. The near 15 percent drop in small diamond prices since June 1, 2018, is the largest decrease in polished diamond prices in the past five years, according to the Rapnet Diamond Index for June 2019. 

“The diamond units in Surat are operating at half the capacity as they are trying to reduce inflated inventory,” the Surat Diamond Association’s president Babu Gujarti told TNN.

“Manufacturers are rejecting high-priced rough that has made the production of polished gems unprofitable. The +11 category goods from seven cents to 10 cents have witnessed the highest price fall due to high inventories.”

Other challenges the diamond industry is currently facing in India include a reduction in the willingness from banks to lend to diamond and jewellery businesses. This is partly due to the ongoing Punjab National Bank fraud case, where jewellers Nirav Modi and Mehul Choksi of Gitanjali Gems have been accused of fraud, totalling over Rs 13,500 ($2 billion).

A number of other smaller-scale fraud scandals have not helped the atmosphere of suspicion, nor has growth in the lab-grown diamond industry creating additional market competition.