It has now come to pass. Diamond imports from Zimbabwe are set to resume in India, with the former agreeing to abide by the Kimberley process scheme that certifies diamonds.
“Demand for roughs has been huge, but there has been restricted supply. Diamond processors have been facing a shortage of rough diamonds which has also resulted in a sharp rise in prices,” said Rajesh Kalra, an official of the Indian Diamond Institute at Surat.
He added that global rough diamond prices had risen by almost 35% in the last year, given the intermittent supply from other countries.
Kalra noted that with the Zimbabwe imports receiving the green signal, diamond processors in India would be able to meet the demand and would be able to “flood the stores worldwide, given the huge pent-up demand for Valentine celebration rings. There is bound to be an increase in February,” he added.
The first consignment of diamonds to arrive on Indian shores in the next couple of days would be rough diamonds worth $160 million, according to Rajiv Jain, chairman of the Gem and Jewellery Export Promotion Council of India. This batch was blocked earlier, with the Kimberley Process Scheme (KPS) banning Zimbabwe from exporting roughs on allegations of human rights violations.
Jain heads the Council, which is a government approved body representing the Indian diamond processing industry. He said that Zimbabwe was holding onto a rough diamond stockpile of over two million carats that it had mined over the last three years.
With the Indian diamond industry falling short by around 30% in its roughs, the shortfall could be easily filled in by the supplies from Zimbabwe.
A large part of Zimbabwe’s rough diamonds are expected to come to India for processing or polishing. Zimbabwe was barred from KP trading in November 2009, because of issues at its Chiadzwe mines in the east of the country. The KP’s 49-member group, of which Switzerland and India as well as Zimbabwe are members, ruled in July 2010 that Zimbabwe could resume limited exports, following a visit by a monitor in September.
According to data published by the Gem and Jewellery Export Promotion Council, India’s polished diamond exports rose 91% year-on-year to $2.49 billion in December 2010. Volume of exports too rose 7% to 5.211 million carat, as the average price increased 79% to $477.82 per carat.
Rough imports in December rose 53% to $1.25 billion, while rough exports grew five-fold to $240.9 million. Data showed that during 2010, India’s polished exports grew 60% to $23.807 billion. Polished imports too have shown a rise to 53% to $14.732 billion, while net polished exports increased 74% to $9.075 billion.
“We have been a net importer of diamonds in 2010,” said Council’s Jain. He noted that India’s net diamond account fell 22% to a deficit of $432 million. With the KPC clearing the way for the African nation, the stones will come into the country easily now,” he said.
Alluding to the October 2010 deal, when the Surat Rough Diamond Sourcing India Ltd, a consortium of 1,500 diamantaires from Surat, entered into a $1.2 billion deal with the Zimbabwe government for a direct supply of rough diamonds, Jain said this was part of an exchange programme.
The deal envisaged that Indian diamond workers would train 1,000 young Zimbabweans as diamond cutters and polishers. This particular deal, the growth of which had been stymied, would also be able to enhance its coverage now, said Jain.
Also on the anvil was more exports to the United States. At a recent Diamond Trading Company (DTC) January sight holding, Indian diamentaires who were present on the occasion, said they were “surprised and pleasantly stumped” at the positive growth story from the US.
“Most of the Indian diamond exporters have seen strong sales from the United States during the Christmas season. Add to this the continuing growth story from the domestic market, especially from South India, and include the jump in sales of diamond jewellery in China – the diamond industry is looking at a good year ahead,” said Shareef Hussainvula, a DTC sight holder and a diamond exporter.
He said that cut and polished diamond exports reached a high of $ 2,492.32 million, rising by a huge 91.48% in December 2010. The figure for the previous year (December 2009) was pegged at $1,301.63 million.
Moreover, global prices of rough diamonds too gained 26% last year, as consumption grew in the US market.
Even as DTC is said to be evaluating the success of the US holiday period and the general pick-up in sales, sightholders from India said there has been a positive jump in sales in the fourth quarter of 2010.
Though exact data has yet to unfold, India continues to be the world’s largest centre for working raw diamonds. The country imported $7 billion of the $25 billion imports worldwide in 2009. Clearly, a new trend is in the offing in 2010.