Exports of Indian polished natural diamonds contracted 29% on-year last fiscal and 20% in the first quarter of this fiscal as demand in the key markets such as the US and China remained sluggish because of changing consumer preference and inflation pressures.
Prices of roughs, therefore, continued to decline leaving diamond polishers cautious of purchases.
Lab-grown diamonds have been culling demand for natural stones - especially the large-carat ones in the US - and persuading miners to tighten leash on supply to limit the impact on prices.
Over the medium term, holiday-season demand and policy changes in key markets will bear watching.
The G7 diamond traceability program, which segregates eligible and non-eligible stones, was to come into force from September 1, 2024, but has now been postponed to March 1, 2025. Accordingly, inventory build-up across the value chain remains to be seen.
That said, India will continue to be the major global centre for polishing of natural diamonds. But their demand in times of growing popularity of lab-grown versions will have a structural bearing on prices.
In this context, Crisil Ratings is organising a webinar where its experts will present their views on:
Impact of other asset classes on the demand for natural diamonds
Outlook on demand from key geographies and supply dynamics
Trends in the prices of natural and lab-grown diamonds, and operating margins of polishers
Working capital cycle roadmap
Credit outlook
This will be followed by a panel discussion with industry experts and a Q&A session.
Disclaimer: This event and its content are intellectual property and confidential information of Crisil. Any use of the same without written permission of Crisil is illegal and hence punishable. Recording the webinar in any form in full or part or copying, altering, distributing or streaming the webinar is strictly prohibited and violation will attract legal action.
