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India’s Diamond Import Ban Shakes Up Global Market

by Victor Adetimilehin

India, the world’s largest diamond cutting and polishing center, has announced a two-month ban on importing rough diamonds starting from October 15. The move is aimed at reducing the oversupply of polished diamonds and stabilizing the prices, which have been falling due to weak demand amid the pandemic. The decision has sent ripples across the global diamond market, as India accounts for about 90% of the world’s diamond processing. According to Bloomberg, prices for rough diamonds have dropped by 16% this year, while prices for polished diamonds have fallen by 8%.


One of the major suppliers affected by the ban is Petra Diamonds, a London-listed company that operates mines in South Africa and Tanzania. Petra has reported that its sales volume for the second tender of 2023 was 344,554 carats, generating $30.2 million in revenue. However, the average price per carat was $88, which is 16% to 18% lower than the previous tender. Petra has also brought forward its sales to avoid the impact of the ban, which will reduce the supply of rough diamonds to the market. The company expects that this will help bring some balance and support to the diamond market and prices in the near future.


Petra is not alone in facing the challenges of the diamond market. Other major producers, such as De Beers and Alrosa, have also cut their production and offered flexible terms to their customers. Some analysts believe that the ban will create a shortage of polished diamonds and boost the demand and prices in the long run. However, others are skeptical about the effectiveness and enforcement of the ban, as some traders may find ways to circumvent it or smuggle diamonds into India. Moreover, the demand for diamonds may remain subdued as consumers shift their spending to other sectors, such as travel and food.


The diamond industry is also facing competition from lab-grown diamonds, which are cheaper and more environmentally friendly than natural ones. According to Transparency Market Research, the synthetic diamond market is expected to grow by 6.9% annually and reach $43.7 billion by 2031. Despite these uncertainties and challenges, some experts remain optimistic about the future of the diamond industry. They point out that diamonds have a unique appeal and value that cannot be replaced by synthetic alternatives. They also note that diamonds have a potential role in various industrial applications, such as cutting, drilling, and grinding.


The diamond industry is undergoing a turbulent period, but it may also be an opportunity for innovation and transformation. As Petra Diamonds CEO Richard Duffy said: “We are confident that diamonds will continue to capture the imagination of consumers across the globe.”

Source: Mining Weekly

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