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Diamond workers get a long Diwali break

Tepid demand has also pushed down prices of smaller sized rough diamond prices by 7-8% in the past one month.

, ET Bureau|
Oct 23, 2018, 09.22 AM IST
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Agencies
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Gem and jewellery exports too plummeted 2.49% in the period in parison to same period of FY18.
KOLKATA: Diamond cutting and polishing units in Surat, reeling under Asian currency devaluation, slow overseas demand and a squeeze on bank credit, have advanced Diwali holiday for the staff by a fortnight, to maintain profitability. Generally, the diamond trade has a month-long vacation from Diwali.

Tepid demand has also pushed down prices of smaller sized rough diamond prices by 7-8% in the past one month.

“Small- and mediumsized manufacturing units have advanced their vacation so that profitability can be maintained. The bigger players are, however, still continuing with manufacturing activity and their Diwali break will start at the usual time. There is a liquidity crisis in the diamond trade as banks are carrying out due diligence of every transactions. Getting funds from banks have become extremely difficult,”

Vipul Shah, former chairman of Gem & Jewellery Export Promotion Council told ET. Currency volatility has already impacted imports of rough diamonds. In April-September, imports of rough diamonds declined by 7.03% in volume terms to 846.55 lakh carats from the same period last year.

Gem and jewellery exports too plummeted 2.49% in the period in parison to same period of FY18. However, Babu Gujarati, president of Surat Diamond Association said the situation was not that dire. “It is business as usual at Surat and most of the units will close down by Nov 3,” Gujarati said. Trade sources said China buyers did not pick up certain categories of diamonds at the recently held gem and jewellery show in Hong Kong.

“Yuan and rupee have fallen against dollar. That is why trade is cautious,” said Shah. The fall raises operating costs for companies supplying in local markets, as they buy diamonds in US dollars and sell in domestic currency.

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