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India Cash Crunch Stalls Gemfields Auction
Dec 4, 2016 7:24 AM
By Rapaport News
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RAPAPORT... Gemfields has pushed back a sale of higher-quality
emeralds by two months to enable Indian buyers to adapt to the government’s decision
to invalidate higher-value currency notes.
The auction of stones from the Kagem mine in Zambia will now
take place in February, whereas it was previously scheduled to be held this month in
Singapore.
India abolished its INR 500 and INR 1,000 rupee notes in
November to curb black-market transactions, in a policy known as
demonetization. Market observers say the move has led to lower liquidity and
will hit
cash-focused jewelry sales and diamond trading.
"The majority of our customers for rough emeralds
hail from India,” said Ian Harebottle, Gemfields’ chief executive officer.
“The new demonetization program will require an adjustment period to allow
industries and stakeholders to adapt to the new policies. For this reason, we
have decided to delay our forthcoming emerald auction by approximately two
months.”
Gemfields’ decision was well received by customers,
Harebottle said. The company’s auction this month of rough rubies and corundum
from the Montepuez mine will go ahead as planned because rubies have a more diversified
customer base that is dominated by Thailand, Sri
Lanka, Myanmar and China, he added.
The move comes after Stornoway Diamond Corporation said that squeezed Indian liquidity led to its decision to withdraw smaller and lower-quality items from its first sale of rough diamonds from the
new Renard mine in Canada. Demand was also dented midway
through De Beers November sight as India’s surprise policy announcement on November 8 fell
in the middle of the sales event, markets sources said.
Image: Géry Parent
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Tags:
China, Demonetization, Gemfields, Ian Harebottle, India, Kagem, Montepuez, Myanmar, Rapaport News, renard, Singapore, sri lanka, Stornoway Diamond Corporation, thailand, zambia
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