The JCK Las Vegas 2012 show, highly anticipated by the
Indian gems and jewelry industry, featured 65 leading Indian exporters as
exhibitors and an appearance by Nirupama Rao, the Indian ambassador to the U.S.
In recognizing the importance of the diamond industry to the country’s economy
— and the record
$8 billion in Indian diamond and jewelry exports to the U.S.
in 2011 — the Indian Ministry of Commerce and Industry designated the JCK show
as an official “India show.”
“There was a healthy interest from buyers at the show in
designs from Indian manufacturers,” said Rajiv Jain, chairman of the Gems and
Jewellery Export Promotion Council (GJEPC). “The U.S. market is showing
extremely positive signs of revival. Europe, though, is still cool in its
demand for gems and jewelry.”
SUCCESSFUL SHOW
Ariez Tata, managing director, Nascent Jewellery Pvt. Ltd.,
agreed with Jain that “The
JCK show in general was very upbeat for all
jewelers. There was enthusiasm from the large retailers and there was optimism
from all the participants. It is very evident that the U.S. market wants to
consume more. It always has been a consumer market but the buying power is not
up to the level it was in previous years. If jewelry manufacturers and brands
are able to create product that fits the U.S. customers’ current requirements,
then there is a market to be explored.”
Kalpesh D. Vaghani, partner, Kapu Gems, also praised JCK.
“This is one of the most important shows and it offers a perfect opportunity to
penetrate further into the U.S. market,” he said. “This year, there was a
healthy number of customer footfalls and we had many serious inquiries.
Overall, it was a positive and constructive experience. Fancy shapes and rounds
in VS to SI were in good demand and we also witnessed a healthy movement in
VVS
goods. In addition to inquiries from the U.S. retailers, we also had some
healthy discussions with customers from Hong Kong, China and other Far Eastern
countries.”
MARKET DYNAMICS
The constant fluctuation in the dollar exchange rates is a
concern to Indian dealers. “With the fluctuation in the dollar rates,
customers’ attitudes are affected,” said Vaghani. “They are trying to be in a
cautious mode. There is speculation going on because of the high prices in the
rough market currently, plus the polished market is also witnessing steep
prices. There is a mismatch in demand and supply. The increase in the prices of
rough along with polished diamonds is due to the lack of a proper organized
channel for the supply of rough diamonds, which results in unwanted markups for
the rough goods. There is scarcity of nice goods and better-quality goods.”
In VVS, all goods are moving well in the international
market in D to I colors and in VS to SI. Goods in certain price ranges are
moving slowly because customers are still reluctant to purchase at high prices.
As for the domestic market, in G to K colors, VVS to VS is moving and there is
a demand for stones between 1 carat and 2.99 carats.
From a retailer’s point of view, Tata reported that “As far
as cuts and clarity are concerned, India’s domestic market is consuming lower
grades and lower colors, and this has boosted what the diamond industry calls
‘slow-moving goods.’ India being so diversified, we do see more acceptance of
these goods in the north. In the south of the country, the major criterion are
clarity and color and therefore the preference is normally for better goods.”
Commenting on what can be expected in the coming months,
Tata shared, “The consumer still wants the ‘flash for cash’ look, and when gold
alone cannot provide that, because of its high cost, less expensive
alternatives in the form of colored or semiprecious stones are being
substituted.”
SHAKING HANDS WITH PAKISTAN
No matter how tense the political relationship between India
and Pakistan, when it comes to art and culture — and matters of business that
have the potential to be mutually beneficial — the two countries can seem very
close. Leading a 12-member delegation, Sanjay Kothari, vice chairman of GJEPC,
recently visited Pakistan and both countries have signed a seven-point agenda
to explore a long-term partnership and leverage the $12 billion gem and jewelry
sector in Pakistan.
The agenda is a laundry list of areas in which the gem and
jewelry industries in both countries plan to cooperate with each other.
Included are: an improved duty structure between the two countries, an exchange
of students and faculty, direct import of gemstones from Pakistan, export of
India jewelry to Pakistan, the participation of a Pakistani contingent in
hosting a country pavilion at IIJS Signature 2012, an Indian contingent at
Pakistani shows and joint trade shows and conferences by the two countries, in
such venues as Dubai and Singapore.
THE MARKETPLACE
- Overall demand in the domestic market is very low.
- Softness in rough and polished prices has been observed.
- The SI category remains in demand but there is much less
demand for IF, VVS.
- Market activity is negatively affected by the unstable
rupee-dollar exchange rate, as well as the liquidity crunch.
- Lower demand and uncertain prices dampen optimism for the
global market.
Article from the Rapaport Magazine - July 2012. To subscribe click here.