MUMBAI: Indian diamonds appear to have lost a bit of their global sparkle this past year as the traditionally strong sales period around Christmas and New Year failed to lift exports of cut and polished diamonds from India.
And there might be more bad news ahead. Orders leading up to Valentine’s Day on 14 February, typically a major factor in January and early February sales, are “not so good”, said one diamond trader who did not want to be named.
“I have been a trader for two decades and I can tell that the business (this year) has been nowhere near the order we did in the last two years,” he said.
Cut and polished diamond exports from India fell 8% in rupee terms and 11% in dollar terms in April-December 2006, according to preliminary figures from the Gem and Jewellery Export Promotion Council.
With the US accounting for 40% of India’s cut and polished diamond exports, it is possible that the awareness created by Edward Zwick’s blockbuster movie, Blood Diamond, could have had an impact on overall diamond sales.
The movie’s title refers to diamonds mined in war zones and sold to finance conflicts. Set against the backdrop of the Sierra Leone civil war, the movie has garnered five Academy Award nominations and given activists a mainstream platform to highlight the problems caused by such diamond mining. It has also been released in India.
In the run-up to the movie, there has been significant media coverage of conflict diamonds with books (The Heartless Stone), songs (Diamonds from Sierra Leone, by rapper Kanye West) as well as a VH1 documentary, titled Bling.
The De Beers Group, which is the world’s largest diamond trader, has come out against the movie, saying it could reduce consumer demand for diamonds and should have carried a disclaimer that the events shown in the movie happened in the past. De Beers maintains that such conflict diamonds are now a miniscule part of organized diamond trading.
But the gem council was quick to discount the impact of Blood Diamond on the export performance.
“We only execute orders in the pipeline and the fall in exports has got nothing to do with the hype about the movie,” says Mehul C. Choksi, co-convenor of the council’s diamond panel committee. He maintains that it is only the cyclical nature of order flow that has dampened diamond sales.
The total gem and jewellery exports from India witnessed a 3% fall during April–August 2006, against a 25% increase in exports the previous year. The diamond trade in the country had taken efforts to publicize the fact that diamonds are put through the Kimberly certification process to make sure it is from a conflict-free region. The process is a global government-diamond trade voluntary initiative that imposes requirements on participants to guarantee that rough diamonds are free-from-conflict diamonds. The process has 45 participants, including India, the US and the European Community.
Controversy or not, diamond traders are sanguine that demand will pick up and prices will rise. “If you want to buy your much desired solitaire, this is the best time,” says the diamond trader.