GJEPC Rejects Media Reports of Big Discount Selling

(IDEX Online News) – India's Gems and Jewellery Export Promotion Council (GJEPC) has denied media reports that diamantaires in the country are offering discounts of 5-20 percent due to liquidity problems caused by the closure of the Antwerp Diamond Bank (ADB) as "not only false but also baseless".

"[The] closing of ADB does not have any immediate direct impact on the trade, neither has it created an overnight liquidity crunch as stated in the news reports," the GJEPC said in a statement. "Any international bank, while closing down, provides an adequate time period for their clients for repayment of loans and does not demand an overnight settlement.

"In the case of ADB, it provides a minimum period of one year to its clients in India and similar if not more to clients in Antwerp and other centers which is adequate for the trade, and gives no reason to emerge in a havoc scenario as wrongly stated."

The mood in the country's diamond jewelry industry is "upbeat with the coming festive season with sales progressing" ahead of the holiday season including Diwali and the Indian wedding season, Thanksgiving and Christmas.

India consumes diamonds to the value of $2 billion annually and exported $19.64 billion of cut and polished diamonds in fiscal year 2013-14. "With US markets on the rebound and European markets steadying up after some turbulent times, there are no circumstances [in which the] trade has ever offered a discount of even 5-10 percent in the past, neither is it expected to offer such a steep drop in prices in the near future or resort to any distress selling, as there is currently no reason [to do so]," the GJEPC statement added.

GJEPC Chairman Vipul Shah, states, “The long term fundamentals of the diamond industry remain strong and robust as there are no new major finds and the sales of diamonds are growing in the emerging markets of China and India."

He added that prices of rough diamonds supplied by De Beers have gone up by 3-5 percent, while Russian goods have seen an increase of 2-5 percent recently.

Despite the GJEPC's comments, diamantaires at the Hong Kong Gems and Jewellery Fair in September said they had come across cases where Indian diamond exhibitors were selling at a discount in order to shift stocks and raise cash.

In addition, a source in India confirmed that some firms, facing financial problems, were selling at large discounts for higher volume sales.