RAPAPORT... Several of the world’s most famous colored diamonds originated in India, among them the infamous blue Hope Diamond, the famed fancy pink Agra Diamond and the pale blue Regent, now a part of the French Crown Jewels. Yet, the consumer in India prefers white diamonds.
No Interest in Colored DiamondsWhite diamonds are viewed as a girl’s best friend, but their counterpart — colored diamonds and gemstones — will have to wait to gain acceptance in India. Hitesh Shah, executive director of Renaissance Jewelry, said: “We started selling in the domestic market only in the past two to three months and, to summarize our experience, we have had some success only with black diamonds. We have not done too well with the other colors — yellow, green, blue, etc. There does not seem to be much brown in the market except top color — off-white. KIAH is the only brand we see promoting champagne actively.”
Vijay Jain from Orra added: “Given the rarity and value of colored diamonds, they have largely been the purview of the rich. On the contemporary scene, several brands in India have experimented with yellow and champagne colored diamonds. Knowledge of colored diamonds in India is limited and several jewelers in the past couple of years have sold treated diamonds as colored diamonds.” Further, Jain said, “Small and round-shaped browns are freely available in the Indian market, but — in the absence of a concentrated marketing effort — the aspiration for brown remains low.”
Vinod Hayagriv from C Krishniah Chetty & Sons pointed out that “Disclosure on treated versus natural untreated diamonds is an issue, since treated diamonds might be sold as natural. We have been marketing natural colored diamond jewelry for about a year now and the response has been excellent with our up-market clients.”
At present, commented Rajiv L. Popley, director of Popley & Sons, “India’s colored diamond market is restricted only to the niche audience to which we cater. We at Popley have a host of private labels under our umbrella and one of them caters solely to colored diamonds. The browns that the Indian market deals in are still not considered premium, as they are off-whites, whereas the browns in the U.S. market are natural champagne diamonds and darker shades of brown marketed for their true colors. The browns in markets like the U.S. are a variety segment that competes with colored gemstones, which are accepted as a mature market.”
Abhijit Achwal, category manager of studded jewelry for Tanishq, said, “The colored diamond market is in the nascent stage of regular jewelry usage and colored diamonds are still not being used in jewelry in India. Whatever colored diamonds are being sold are predominantly in the metropolitan areas.”
Foreign Interest
Commenting on international demand, Ishu Datwani from Anmol Jewelers said, “Japan and the U.S. are the two places where a lot of colored diamonds are sold. Coffee diamonds — brown diamonds — were doing quite well until recently and one of the reasons was that the price was much lower than the whites. But lately, jewelry with colored diamonds is not doing too well in India.”
In discussing the market for colored diamonds, Sanjay Kothari, convener of promotions, marketing and business development for the Gem and Jewellery Export Promotion Council (GJEPC), said: “The Indian colored diamond market exists mostly in the northern region. There is an abundance of browns in the market at the moment, as cheaper goods are not selling in the international market. The supply of the browns is more or less the same as earlier, but, as the consumer taste has been changing, the demand for browns has been less. We feel that lately people are not buying the rough from Argyle, the major source for brown goods. Since new stock is not coming, inventories are expected to be sold.”
Market Shows Signs of Recovery
A new study by ICRA, a leading Indian investment information and credit rating agency, reported that India has achieved the reputation of being the world’s leading diamond cutting and polishing center for smaller stones. Now, industry leaders are hoping to process larger stones to achieve even greater growth by utilizing modern advanced technologies in addition to the country’s cheap, abundant labor. Quoting figures released by GJPEC, ICRA said exports of gems and jewelry are expected to reach $20 billion by 2007. “For the past 15 days, the industry has been showing signs of recovery,” said Kothari, attributing the increase in market demand “primarily to the forthcoming festival of Diwali and the beginning of the marriage season in India.”
The Marketplace• Overall trading activity improved in September. The local market is optimistic for pre-Diwali sales. Melee goods were selling extremely well in September.
• Goods below 0.50 carats in lower piqué categories are moving extremely well in the following price range:
below 0.18 carats from $150 down 1/5 from $375 down
1/4 below $450
1/3 and 3/8 below $350.
• Good demand for white and brown stars and melee goods:
whites from $250+
browns from $100 to $150.
• Activity is very good in I2/J+ goods under 0.90 carats.
• 0.70 to 0.99 carats are still very hot, mainly for SI1+/J+.
• 1 carat+ goods are easily available across the board but premium sizes for better colors and clarity I+/VS+ are hard to find.
• 2 carats are quite slow overall with prices stable and goods easily available.
• More 3 carats were seen in the market in September, but goods above 5 carats — especially VS+/I+ — are almost impossible to find locally.
• Demand is very good for marquise, princess, ovals and pears in SI+/I+ all the way to 1.50 carats.
Article from the Rapaport Magazine - October 2006. To subscribe click here.