Diamond market facing drop in sales

R. Ramabhadran Pillai

The ‘cut and polish’ segment, mostly outside the State, has suffered severe losses

There is 30 per cent decline in demand

Signs of recession seen in diamond sale in the State

KOCHI: Diamonds continue to glitter in Kerala though it’s a lacklustre performance for the diamond cutting and polishing industry across the country.

The sheen, of course, is losing in a market dictated by the strength of the economy. In fact, diamond dealers in general, who share the concerns of the industry, are not too optimistic of the times ahead. As far as the health of the Kerala economy remains sound, there is not much cause for worry, but questions abound as to whether the State would be able to withstand the pressures getting stronger elsewhere.

The ‘cut and polish’ segment of the diamond industry, spread mostly outside Kerala, had suffered severe losses, said Suresh, in-charge of the diamond sales of Joy Alukkas, Thrissur. Europe and the U.S. were the main export markets of the Indian diamond industry. Recession in those markets had crippled the customer base. This had forced the Indian importers of raw diamonds to declare a three-month stoppage of imports and subsequent layoff at many units in north India.

The finished products exported to foreign markets belonged to the cheaper, low quality genre as there was widespread demand for the same.

The situation in Kerala was different as the diamonds being traded in South India, in general, and Kerala, in particular, were of higher quality, he said. While the prices of the exported variety had to be reduced to make adjustments for the reduced demand on account of the recessionary developments, the prices in the IF (internally flawless) variety, traded in Kerala, had continued to attract buyers. Nevertheless, it was uncertain whether the demand would remain even because the recession could deepen its hold on the Gulf countries, a potential source of money for a large number of Keralites.

There was 30 per cent decline in demand, said a top executive of Kirtilal’s, a dealer of diamonds in Kochi. Signs of recession had already crept in the diamond sales, he said. It was more significant as the drop had happened during the wedding season, he pointed out.

Sunny, proprietor of Sunny Diamonds, having outlets in Kochi and Thiruvananthapuram, did not see a crisis in the Kerala diamond market. A trend had already set in among Keralites. Buying a diamond pendant or a ring had become a trend in Kerala. For many people, it was a dream come true, he said.

The market in Kerala was expanding. Educated girls as well as parents were increasingly turning to diamonds to give a special touch to the wedding jewellery. The dealer’s money back offer proved very attractive to buyers.

The dealer’s outlets offer a lifelong money back guarantee under the unique scheme, he said. Investment in diamonds was safe as it was not subjected to commodity trade where speculation rules, he said.

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