The world's biggest diamond cutting and polishing centre in Surat is bracing for the increased flow of lab-grown synthetic diamonds after De Beers increased the prices of rough diamonds in the small category by around 6-7 per cent and big diamond category by an average of 5 per cent at first sale sight of 2014 held in Botswana's Gabarone on Monday.
Industry leaders fear the hike in rough diamond prices by the De Beers is set to affect the profit margin of the small and medium diamantaires and force them to go for buying cheap lab-grown diamonds, which would be later mixed with the natural diamond parcels.
The DTC sightholders who attend the first sale sight of De Beers at Gabarone on Monday informed that the company has increased prices in all the diamond categories by an average of 5 per cent.
While the big diamond category above 0.50 carat has attracted price hike between 5-6 per cent, there was a 6-7 per cent increase in the small diamond category below 0.30 carat.
"De Beers is anticipating the Christmas season in 2014 to remain robust following increased demand from US and other diamond consuming markets. However, they will continue to increase the price till March-2014. But, things are not as good in the cutting and polishing centre as many small time unit owners are not in the position to buy costly raw material. Instead, they will go for lab-grown diamonds and mix them with the natural diamond parcels," said a DTC sightholder requesting anonymity.
In order to tackle the issue of lab-grown diamond being mixed with the natural diamond parcels, the Gems and Jewellery Export Promotion Council (GJEPC) trying hard to convince the Director General of Foreign Trade (DGFT) and the ministry of commerce to separate out the HS code for the natural and lab-grown diamonds.
Pankaj Parekh, vice-chairman, GJEPC said, "It is a big cause of worry for the industry as the lab-grown diamonds are coming into the country and they are being exported along with the natural diamonds under the single HS code. We urgently need separate HS codes for the natural and lab-grown diamonds to stop the menace"
Dinesh Navadia, president, Surat Diamond Association (SDA) said, "The small unit owners can't buy raw material from the second market as the prices will shot up to 8-9 per cent. In 2013, there was a 15 per cent increase in the rough diamond prices."
Source:- timesofindia.indiatimes.com
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