RAPAPORT... The industry buzz right now has it that India’s diamond manufacturers and exporters are facing a slow fall, and that they might have considerable problems deciding what to do with all of the surplus polished goods piling up in their warehouses. What do Indian diamond jewelry wholesalers on the streets of New York and other cities say about these claims? Do they affirm or deny the bleak forecast?
Mixed Reports
“The market is a little slower than we’d like it to be,” said Atit Mehta, sales supervisor for the New York–based Atit Diamond Corporation. “People are skeptical about the upcoming season and how well sales will do.”
Mehta attributes this stark climate to a number of factors, including a global trend toward retail purchases that are smaller and smaller in volume, and volatile rough prices threatening to rise ever higher. Nevertheless, he reported strong demand from some of his customers for 75-pointers and upward, and a sharp rise in demand for certified stones.
Ravi Ramani, sales executive for Adamas India Inc. in Cherry Hill, New Jersey, said that the mediocre sales of May and June picked up a bit in July and August, but the latter part of the summer was still a period in which “people would rather spend their money on cruises and vacations than buying diamonds.” His company did enjoy some traffic in VVS to VS white diamonds, and its diamond sales extend over an impressive range of sizes and price points, all the way from $800 for a half-carat stone to $10,000 diamonds. The smaller diamonds are more likely to be picked up through online sales, Ramani said, adding that “manufacturers are complaining” about the difficulty of getting some of the more specialized stones.
Jacqui Ekstein, the principal of Eknam Diamonds Inc. in New York, said that his goods are moving, though he doesn’t expect to break any records soon. Manish Shah, the president of Diamond Deal, a New York–based importer with an office in Mumbai, affirmed that “The season has been slow. It’s a concern for everybody.” While his company was enjoying brisk sales of 2- and 3-carat stones a year ago, the climate has cooled considerably, mitigated only slightly by the continuing sales of off-sizes like 7-grainers, 2.50- and 3.50-carat stones. In Shah’s view, this tepid performance reflects the overall sluggishness of the U.S. economy and the weakness of the dollar.
Jewelry ShowSam Nazarian, one of the principals of A&M Diamond & Jewelry Inc. in Los Angeles, recently returned from the Indian International Jewellery Show in Mumbai, which ran from August 30 to September 3. “All the offices there were extremely packed, and there were buyers from all over the world, but the prices were not reasonable,” he said. Nazarian attended the show in the hope of placing orders for some big diamonds, but most of the stones on display were 75-pointers to 2-caraters. There were lots of melees and a smattering of pear shapes and marquises, he noted. Regardless of the prices, the swelling crowds indicate strong demand and a healthy climate for India’s diamond jewelers, contrary to the negative forecasts.
Nilesh Sheth, account executive at Nice Diamonds in New York, does not agree with the predictions of an excess inventory in India that nobody wants to touch. “If the U.S. is not buying, there are other markets taking up large volumes, like China and the local Indian market,” Sheth said. Europe is a small but growing market, with the former Eastern bloc upping its demand steadily. While he envisions a possible slowdown in certain articles in the higher price points, Sheth believes that the promotional products have a secure niche, whether the accounts are in one hemisphere or another.
“I don’t see pileups anywhere. If it’s a single-digit loss of sales, that’s not going to make or break anybody,” Sheth added. His own company is selling its stock from India at a decent rate, particularly its larger rounds and princesses, while pursuing a concomitant strategy of establishing new accounts and generating new sales. “The people who complain sit around and do nothing,” Sheth said. The new accounts and the new bulk orders are there if you look hard enough, ensuring that you are in a position to “divide the risk” when one account drops out by leaning harder on the remaining ones.
The Marketplace• Large rounds and princesses are in strong demand, but rounds are doing better.
• Small melees are doing very well.
• Modest demand exists for ovals.
• Some demand exists for yellow diamonds, half carat to 2 carats, in fancy yellows and pinks.
• Rough supply is tight, but keeping pace with demand.
Article from the Rapaport Magazine - October 2007. To subscribe click here.