AHMEDABAD: It is uncertain times for diamond merchants of Gujarat. The world’s largest rough diamond mining company Alrosa is based in Russia.
As a result, the world’s biggest diamond cutting and polishing centre in and around Surat has halted operations, in anticipation of widespread disruptions in international supply.
They are also worried that because of the war, the price of rough diamond will see a steep increase.
Around 8-10 important diamond enterprises controlled by Gujarati diamantaires are functioning in Russia. Because of the war, supply to India has become uncertain.
Former GJEPC (Gems and Jewellery Export Promotion Council) chairman and diamantaire Dinesh Nawadia said, “Six per cent of rough diamonds come from Russia. A large part of this is from Alrosa. If a war or war-like situation continues for a long time, supply of rough goods will stop and the price of polished diamonds will likely go up. Diamond prices went by almost 50 per since last September. So buyers are already sceptical.”
Since June 21, there has been a significant mismatch in diamond pricing, with rough diamond prices increasing by 55 to 60 per cent and polished diamond prices increasing only by 15 to 30 per cent.
“The Russia-Ukraine war has suddenly changed a few things in this sector,” stated Naimesh Pachhigar, owner of a diamond company.
“Because of the interruption in logistics, the price of gold and diamonds will go up even further.”
Effects are already being felt.
“If the war continues, it will have a big impact on the diamond sector. Manufacturing activity in the industry has come to a halt over the last two days. Because of rising rough diamond costs, there is a perceived shortage of polished diamonds,” he added.
Industry sources said the small diamantaires are at the receiving end.
“Due to higher gold and diamond prices, there is an order-based demand in the industry. There is shortage of polished diamonds in the market and the Russia-Ukraine war is going to make the situation more critical for the industry,” said another diamantaire.