Diamond exports set to fall by 25-30% to multi-year low this fiscal

The nation’s lower and polished diamond (CPD) export is ready to fall by 25-30 per cent this fiscal to a multi-year low of USD 15-16 billion because of the large demand hunch within the largest consuming markets of the US and China, and is unlikely to get higher even subsequent fiscal, says a report. Accordingly, the outlook for the CPD trade is unfavorable because the exports will plunge to a multi-year low within the present fiscal, Care Rankings stated in a notice Wednesday, including it doesn’t anticipate a major restoration in FY25 both.

India is the world’s largest centre for diamond chopping and sprucing, accounting for round 95 per cent of the world’s polished diamond manufacturing, whereas the US and China are the first consuming markets, collectively accounting for round 65 % of the nation’s exports.

Following the pandemic, a surge in diamond jewelry demand, spurred by the financial stimulus within the US and restricted alternatives for experiential spending, propelled CPD exports to report highs in FY22 at USD 24.43 billion and in FY23 at USD 22.04 billion.

Nevertheless, a decline in CPD demand started in December 2022 and regardless of expectations of a restoration throughout the vacation season of H2FY24 because of the financial situations within the US and China, the elevated different discretionary spending choices, the rising marketplace for the cheaper lab-grown diamonds (LGDs) and so forth have negatively affected exports. This resulted in a 28 per cent on-year drop in exports to USD13.04 billion within the first ten months of FY24, in line with the report.

This demand-supply imbalance has put strain on the pricing of polished diamonds, resulting in a worth correction to the tune of 5-10 per cent for diamonds beneath 0.3 carats, 20-30 per cent for 0.3-3 carat diamonds, and 10-20 per cent for diamonds above 3 carats in 2023, resulting in decrease export earnings.

One more reason was the excessive stock at the beginning of FY24 and the following fall in costs, which impacted the size and revenue margins, leading to a higher-than-anticipated decline in complete working revenue, profitability and gross money accruals. Thus, the outlook for the CPD trade is unfavorable and the company expects exports to hit a multi-year low in FY24 with a 25-30 per cent fall in realisation to USD15-16 billion. Additional, the company doesn’t anticipate a major restoration in FY25 as nicely.