Sourcing

Is Current Diamond Industry Turbulence Shaping a ‘New Normal’?

SourcingOct 08, 2024

Is Current Diamond Industry Turbulence Shaping a ‘New Normal’?

Industry players have found ways to cope with market conditions while working to reshape themselves in the face of emerging realities.

Diamond on polishing wheel Venus Jewel India
A Venus Jewel employee polishing a diamond on a wheel at the company’s facility in Surat, India. The company, a leading manufacturer of natural diamonds, is one of a number of big companies that has had to shift focus to cope with current market realities.
Mumbai, India—The Indian diamond industry enters the fourth quarter having been on a roller coaster ride for much of the last two years.  
 
There have been multiple twists and turns, and ups and downs, with the most recent dip spanning the past few months. 
 
During this period, polished inventories rose despite some improvement in demand for diamond jewelry in the United States, and prices remained flat or fell further, with trends varying across sizes and qualities. 
 
“In July/August we witnessed another wave of turbulence,” said Vipul Shah, chairman of India’s Gem & Jewellery Export Promotion Council (GJEPC).   
 
While earlier downturns saw a coordinated response from the Indian industry, companies are now being encouraged to chart their own paths.  
 
“We have been emphasizing the importance of self-discipline in such situations,” Shah stated.  
 
Drawing Up Individual Road Maps 
The industry has adopted a variety of strategies to cope with the current market conditions. 
 
In late August, diamond manufacturing giant Kiran Gems declared an unprecedented 10-day vacation for its employees coinciding with the Indian festival of Janmashtami.  

A few other companies did likewise, but there were also many, including larger firms, that continued their day-to-day operations without interruption. 
 
Some already have adopted staggered working hours, shorter work weeks, or longer-than-normal vacations.  
 
Others have adjusted operations over time and enhanced their abilities to navigate turbulent periods.  
 
Venus Jewel is one example of such a company.  

Partner Devansh Shah said the company recognizes the importance of maintaining industry confidence without compromising its core values.  

“We have proactively responded to the market shifts, and remain adaptable to changing conditions, responding with agility and focus,” he explained.  

This includes at present, a greater focus on the Indian market, which has remained buoyant, he noted. 

Hari Krishna Exports also has fined-tuned its operations, including growing the network for its diamond jewelry brand, Kisna, in India. 

IIJS show Diamond Pavilion
Buyers crowd the aisles of the Diamond Pavilion at the IIJS show in India. The Indian market has come into focus as a potential future source of demand for natural diamonds in the face of slowing sales in other markets.

Despite tough conditions overall, the company has announced an incentive program aimed at boosting productivity and enhancing the skills of its artisans.  

“This has uplifted employee morale, encouraging them to improve their craftsmanship while receiving rewards for hard work,” a company spokesperson said.   

Industry leaders also have welcomed the measures taken by leading miners—De Beers Group, Alrosa, and others—to regulate supply. 

The latest import/export figures published by GJEPC indicate that in August, imports of rough diamonds declined 49 percent in value terms and 54 percent in volume terms (number of carats) year-over-year. 

Polished diamond exports, meanwhile, were down 20 to 25 percent in value terms and 20 to 22 percent in volume terms year-over-year. 

However, the value of exports in August was up 14 percent from July, indicating that conditions are improving. 

‘Green Shoots’ That Need to Be Nurtured 
Russell Mehta, CEO of Rosy Blue India, believes that this multi-faceted approach has helped stabilize the situation for now, and while year-end demand from the U.S. is expected to be on par with last year, the situation in China is still bad.  

“The segment for smaller diamonds has been less affected, while certified goods have been hit more. Currently, we are seeing green shoots in some categories,” he said, meaning that certain categories are starting to show signs of recovery. 

“These will have to be carefully nurtured going forward and it is likely that the annual Diwali break [in late October/early November] will be longer than usual this year,” Mehta continued, adding, “All eyes will be on Q1 2025.” 

D. Navinchandra Jewels, which exports diamond jewelry to North America, also noted mixed trends, though it expects U.S. demand to remain stable this year.  
 
The company reported that jewelry set with small diamonds (0.20 carats and below in SI1 and lower qualities) that are relatively lower-value items have not seen major price fluctuations for the past 18 months. 
 
At the high end, the niche market for jewelry set with large stones (above 5 carats) also remains stable.  
 
But in the middle segment, for jewelry using higher quality (SI1 and above) small diamonds (0.20 carats and below) and jewelry set with certified goods (0.30-5 carats), there has been more price volatility, and this may continue for some time. 
 
Punit Mehta, D. Navinchandra Jewels partner and CEO, said, “Now there is a low-but-steady demand as U.S. retailers restock for the coming season.  
 
“They are now holding lower inventory of natural diamond jewelry and seem to be buying only what they need. Maintaining low inventory levels at all segments of the diamond industry seems to be the main focus for most players who want to protect their bottom line.” 

 Related stories will be right here … 

A Longer-Term Perspective
GJEPC Chairman Vipul Shah stressed that steps to self-regulate the supply side of the business must be combined with campaigns to boost consumer demand.  
 
“GJEPC is formulating plans to do this in the key markets in collaboration with other stakeholders including the Natural Diamond Council and leading retailers. We hope to roll out promotions at appropriate levels during peak seasons in each of these markets soon.” 
 
It is also necessary to look beyond short-term measures and plan for the future, many feel.  

 “At an industry level there may be some consolidation, while individual companies will have to ‘right-size’ their operations to optimum levels.” — Russell Mehta, Rosy Blue 
 
“The industry needs to recognize ground realities,” said Rosy Blue’s Russell Mehta.  
 
He foresees a “new normal” emerging, with the market for loose polished hovering at current levels over the next few years.  
 
“The pipeline will have to deal with this, and not react to immediate ups and downs,” he said.  
 
“At an industry level there may be some consolidation, while individual companies will have to ‘right-size’ their operations to optimum levels to retain maneuverability in the face of unexpected scenarios.” 
 
There are indications that these longer-term processes already have been set in motion by the winds of change, though it may take more than a few years for a stable equilibrium to be reached.  
 
Exports of polished diamonds from India remain 20-30 percent below pre-COVID peaks, and it is becoming increasingly clear that there may be no going back. 
 
New investments in cutting and polishing operations have plateaued over the past few years.  
 
Meanwhile, the infrastructure and manpower that has been made redundant by the slowdown have been redeployed into the rapidly expanding lab-grown diamond business.  
 
The industry is definitely reshaping itself, and the process may become more organized once a proposed government-backed taskforce to discuss policy measures and other steps takes shape.  

Supply-Side Dynamics
The pending sale of De Beers also will almost undoubtedly affect the diamond industry’s future.  
 
Currently, most Indian diamantaires have taken a wait-and-watch approach.  
 
They feel that a change in ownership will not affect mining operations in the near-term, though fresh investments and expansion may remain on hold for a while.  
 
Yet, if rough can be mined and sold profitably, any new owner will surely find ways to raise the required capital, they pointed out. 
 
Russell Mehta further noted that the planned increase in allocation of Botswana rough, from 30 percent to 50 percent of total production over 10 years, to the government-owned Okavango Diamond Co. bears watching.  
 
The increased allocation is one of the terms of the Botswana government’s new 10-year sales agreement with De Beers Group that was reached last July but, as of press time, has not been officially finalized.   
 
“A state-run company may have larger social objectives, unlike a private enterprise that aims to maximize shareholder value,” he said.  
 
“How will this rough be distributed—through fixed allotments to long-term clients or auctions—at what prices, and what will be the share of global sales vis-à-vis beneficiation, all these could impact the pipeline.”  

The Latest

Surveillance footage of robbery
CrimeMar 28, 2025
2 Suspects Arrested in $1.7M Smash-and-Grab Robbery of NY Jewelry Store

Authorities said the robbers fled with jewelry and 70 Rolex watches, later taking pictures of themselves posing with big stacks of cash.

LÖF The Valentine Ring
CollectionsMar 28, 2025
Piece of the Week: Löf’s ‘The Valentine’ Ring

The ring's design features contrasting lines influenced by work from architecture-inspired photographer Nikola Olic.

Eggs on a shelf
SurveysMar 27, 2025
Consumer Confidence Falls in March Amid ‘Gloomy’ Outlook

The Conference Board’s index fell as consumers continued to worry about the impact of tariffs, the labor market, and the price of eggs.

bench jeweler 1872x1052.png
Brought to you by
The Heart of the Industry: Giving Bench Jewelers the Recognition They Deserve

Bench jewelers spend years honing their skills, Jewelers of America’s Certification validates their talents.

Richard Rainsford memorial ring
AuctionsMar 27, 2025
300-Year-Old Ring Linked to Witch Trial Judge Goes Unsold at Auction

However, two medieval jewels surpassed estimates at Noonans Mayfair’s recent jewelry auction in London.

Weekly QuizMar 27, 2025
This Week’s Quiz
Test your jewelry news knowledge by answering these questions.
Take the Quiz
Austin Butler
WatchesMar 27, 2025
Austin Butler Joins Breitling as Brand Ambassador

The Oscar-nominated actor debuted in the campaign for the new “Top Time B31” collection, which introduced Breitling’s Caliber B31.

Bailey’s Fine Jewelry storefront
IndependentsMar 26, 2025
Bailey’s Fine Jewelry Acquires Fellow NC Independent Jeweler

The family-owned retailer is the new owner of Morrison Smith Jewelers in Charlotte, North Carolina.

Facets-of-Fire-Difference-You-Can-See.jpg
Brought to you by
Natural Diamonds Should Mean More

Natural diamonds mean more than lab-grown, but when every cut is ideal, they all look the same. Customers want more—Facets of Fire delivers.

Bulova 150 Art Deco Miss America Watch, 150 Art Deco Pocket Watch
WatchesMar 26, 2025
Bulova Celebrates 150th Anniversary With Art Deco Watches

The “150 Art Deco” collection features a Miss America timepiece and a pocket watch from the brand’s Archive Series.

Alex Wellen
MajorsMar 26, 2025
QVC Group Appoints New President

Alex Wellen, formerly CEO and president of MotorTrend Group, has taken on the role.

Jewelers of America’s new logo
Events & AwardsMar 26, 2025
Jewelers of America Announces New Funding Initiative

The Impact Initiative is part of the nonprofit association’s new three-year strategic plan.

Christies regent kashmir sapphire and regal Burmese ruby
AuctionsMar 25, 2025
Christie’s To Auction 35-Carat Sapphire, 13-Carat Ruby

The ruby and the sapphire, which Christie’s calls a “once-in-a-generation masterpiece,” are part of the upcoming Hong Kong jewelry auction.

Diamond earrings held in gloved hand
CrimeMar 25, 2025
Tiffany & Co. Earrings Swallowed Following Grab-and-Run Theft Recovered

The two pairs of earrings, snatched from a Tiffany & Co. store in Orlando, Florida, are valued at a combined $769,500.

Emmanuel Raheb CEO of Smart Age Solutions
ColumnistsMar 25, 2025
The Smart Lab: Using Short-Form Videos to Sell More Jewelry

The time to start experimenting with video content is now, writes columnist Emmanuel Raheb.

Pomellato Nudo High Jewelry Campaign
CollectionsMar 24, 2025
Pomellato’s Latest ‘Nudo’ Collections Revamp its Classic Design

From striking high jewelry to miniature fine jewelry, the new chapter continues to highlight gemstones featuring its signature 57-facet cut.

Jamie Singleton, Bill Brace, Rebecca Wooters, Bill Luth
MajorsMar 24, 2025
4 Top Executives to Depart Signet Jewelers Amid Turnaround

The jewelry giant is reducing its senior leadership by 30 percent as part of its new turnaround strategy.

Sothebys Watchcheck
WatchesMar 24, 2025
Sotheby's Now Offers Watch Repair Services

The auction house's partnership with online watch servicing platform WatchCheck makes repairs convenient and accessible, it said.

Swarovski lab-grown diamond Galaxy earrings
FinancialsMar 21, 2025
Swarovski Says Its Lab-Grown Diamond Sales Doubled in 2024

The company also noted record sales in the United States and a strong performance in its jewelry category.

Branko Gems
SourcingMar 21, 2025
BrankoGems To Hold Conference in Montana

The event, set for June 13-15, will feature educational presentations and guided visits to the state’s sapphire mines.

Til Death Ring by Marrow Fine
TrendsMar 21, 2025
Piece of the Week: Marrow Fine’s ‘Til Death’ Ring

After the black enamel band became a best-seller for the brand, it has now launched an enamel ring personalization program.

Korman Fine Jewelry Austin store
IndependentsMar 20, 2025
Korman Fine Jewelry’s New Store Is Double the Size

The Austin, Texas, jeweler’s new 11,000-square-foot store is set to open this summer.

JCK Rocks 2025
Events & AwardsMar 20, 2025
JCK Rocks to Feature Snoop Dogg, Jason Derulo

The rapper and singer-songwriter will perform at Tao Beach on June 8.

Conversations with Chris Ploof YouTube Video Series
TechnologyMar 20, 2025
Chris Ploof, Severine Ferrari Launch YouTube Video Series

“Conversations with Chris Ploof” covers tips for men buying wedding bands, behind-the-scenes footage of Ploof in his studio, and more.

Limelight Lab Grown Diamond store in India
Lab-GrownMar 20, 2025
Beyond Jewelry: Possibilities in the Lab-Grown Diamond Sector

As lab-grown diamond brands pop up across India, academics are researching how to grow demand outside of the jewelry industry.

Lab-grown diamond engagement ring
FinancialsMar 19, 2025
Signet Jewelers to Close Stores, Cut Staff Amid Declining Sales

The moves are part of the retailer’s new turnaround plan, “Grow Brand Love,” which also includes emphasizing brand loyalty over store banners.

Zoë Kravitz in Rush Hour Collection
CollectionsMar 19, 2025
Jessica McCormack’s New Collection Elevates Office Wear

The “Rush Hour” campaign stars Zoë Kravitz in bold, wearable pieces designed to make a statement in the workplace.

Gallet Flying Officer watch
WatchesMar 19, 2025
Breitling Acquires Another Watch Brand From the 1800s

Breitling is reviving Gallet, which was founded in 1826 and is known for making watches used in the early days of long-distance travel.

×

This site uses cookies to give you the best online experience. By continuing to use & browse this site, we assume you agree to our Privacy Policy