As the price of gold continues to rise, consumers in India are looking at diamonds as an alternative, and the market is set for a boost from a shipment of rough diamonds from Zimbabwe worth $153m.
MUMBAI -
India's commerce ministry has given the go-ahead for the import of a shipment of rough diamonds from Zimbabwe valued at over $153 million. The diamonds, mined in the Marange fields, were purchased at an auction in November 2010 and shipped to Dubai. The consignment was kept pending a decision by the Kimberley Process to reinstate the embargo against diamonds from Zimbabwe.
Following the nod from the Kimberley Process' working group on monitoring, the UAE released the shipment of diamonds on June 29 this year, and the diamonds made their way to India. However, they were again held up at the ports, pending a final approval from the Indian government.
The last nod has finally come through and importing Kimberley Process certified rough diamonds from the Marange mines is soon to become a reality for Surat diamantaires. The president of the Surat Diamond Association Rohit Mehta said an agreement had been reached by the Kimberley Process during the recently concluded World Diamond Congress, which would enable Zimbabwe to carry out exports of diamonds from its Marange deposits.
Traders said consumers in India are looking at diamonds as an alternative to gold, where prices have risen strongly. The conversion rate in diamond buying, that is converting from low carat to high carat diamonds, has gone up to 30% in India, of which 18% are first time buyers. The new cache of diamonds from Zimbabwe could well help this trend.
India's Gems and Jewellery Export Promotion Council, which is the country's import and export authority, has instructed traders to stop trading in Zimbabwe's diamonds. It had also asked relevant departments to keep a close watch on the import of diamonds without the Kimberly Process Certification Scheme certificates.
"The deposits in Marange diamond mines are valued at close to $2 billion,'' said Mehta, adding it would open huge opportunities for the diamantaires at Surat. With close to 4,500 diamond polishing units, Surat is a major importer of rough diamonds in India. The state also polishes almost 95% of the world's diamonds.
Mehta added that the influx of rough diamonds is expected to ease the pressure faced by the local diamond industry in light of the spiraling rough prices.
According to statistics release by the Kimberley Process, Russia produced 34 million carats of rough diamonds in 2010 worth $2.38 billion, while Botswana dug out 22 million carats in 2010 worth $2.59 billion. Botswana has reclaimed the diamond producer top spot.
Other top diamond producers by volume in 2010 included the Democratic Republic of the Congo with 20.17 million carats, South Africa with 13.67 million carats, Canada with 11.8 million carats, Zimbabwe with 8.44 million carats and Angola with 8.36 million carats.
Europe was the top rough importer in 2010 with $13.59 billion worth of goods, followed by India at $11.23 billion, Israel with $4.43 billion, Dubai with $2.06 billion and China with $2.02 billion.
REUTERS/Arko Datta
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