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RAPAPORT... India's gem and jewelry industry leaders deferred a rough diamond import ban, for now, and urged self discipline at manufacturing businesses that import and purchase rough stones. In a meeting held today between the Gem & Jewellery Export Promotion Council (GJEPC), the Bharat Diamond Bourse (BDB) and Mumbai Diamond Merchant Association (MDMA), leaders discussed the way forward given a sluggish outlook for diamond demand, severe lack of liquidity and profitability at the manufacturing level and the misalignment of rough prices against polished prices. As stated by the GJEPC following the meeting, the group of leaders unanimously decided to defer a voluntary rough import ban, similar to one enforced in November 2008, for the time being. In addition, several issues were addressed by the organizations' leaders, resulting in action items. While rough imports would continue -- however restrained it might be -- business owners must make their workforce the first priority, according to the leaders. The three groups, along with the Surat Diamond Association (SDA), will create a committee of 10 to 15 business owners from all areas of the trade to bring forward pressing issues. A delegation of nominated representatives from the trade will meet diamond miners, bankers and governmental agencies to review the issues affecting the manufacturing sector. The group also stated it would take promotional efforts forward with diamond miners and other segments of the industry to increase diamond and jewelry demand. All stakeholders will be taken into confidence, including small manufacturers from Surat through the SDA. The situation will be monitored and a follow up meeting will be held in one or two months to discuss the outcome of these actions. Speaking exclusively with Rapaport News, Vipul Shah, the chairman of the GJEPC, said, “The message is very loud and clear that the industry has to pratice self discipline. "Each and every individual company has to be responsible enough and make sure that the business they run is profitable; and, at the same time, they need to monitor demand prevailing in the market, currently in the world, and manufacture accordingly. (Diamond miners) need to also curtail production and this is the message we want to convey," he said. Shah stated that the committee will be formed within a week, comprised of members from GJEPC, SDA, BDB and MDMA. The first order of business for the committee will be to look into the integrity of the trade and suggest long term and short term measures. Sanjay Shah, the director of Gold Star Diamond Pvt. Ltd., said, “It is up to the individual to restrict themselves.
"With the current scenario, I feel that if we do not produce diamonds and jewelry for the next six months, minimum, it may help improve the situations," he added.
According the Sanjay Shah, there have been no efforts to push sales through strong marketing campaigns at the consumer level and at the wholesale level, there has been overstocking of goods at every level -- from rough diamonds to finish jewelry - both issues of which remain of great concern. Sanjay added that with the market underperforming, coupled with defaults and a few bankruptcies, the banks have lost money, as well, and are therefore scared to continue supporting the industry. "This will be a major issue, as not only we may see business shrinking but also a major financial crunch due to huge inventory, which is difficult to sell," he said.
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