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Steady but Cautious Start to IIJS India Show

Aug 6, 2015 10:41 AM   By Avi Krawitz
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RAPAPORT... The India International Jewellery Show (IIJS) opened Thursday to steady traffic but sluggish diamond sales. Exhibitors maintained low expectations for the five-day event but expect to strengthen relationships with clients ahead of the October Diwali festival and subsequent wedding season.

“Diamond markets are tough at the moment but, for us, the U.S. and India are moving,” said a Mumbai-based diamond manufacturer who requested anonymity. “It’s the first day of the show which is usually slow. People are roaming around, browsing and looking for bargains, but hopefully activity will pick up over the weekend.”

The difficult global market conditions was a recurring theme among manufacturers on the trading floor, and at the opening ceremony attended by Paul Rowley, vice president of De Beers global sightholder sales; Rita Teaotia, India’s commerce secretary; and Vipul Shah, chairman of the Gem and Jewellery Export Promotion Council (GJEPC), which organized the event.

Shah noted that India’s gem and jewelry industry has seen slow growth in exports in the past few months but he maintains a stable outlook for the market. He said that the GJEPC expects orders at the show to top last year’s level by some 20 percent.

As part of that effort, the GJEPC expanded the number of exhibitors at the show by 25 percent to exceed 1,100, while the booth count grew by 11 percent to more than 2,000. The expansion resulted in a shift in location for some sections – including the international pavilion, and laboratories and education, while Shah stressed that old exhibitors largely maintained their same familiar location. Exhibitors were also much happier with the design and presentation at the show, which had been a source of complaint in previous years.

Traffic on the first day was strongest in the gold jewelry section, where wholesalers observed a steady increase in demand as gold prices depreciated in the past month, including in rupee terms. Polished diamond suppliers have not seen the same growth and noted that their buyers are selective and filling existing orders with very little buying to build inventory.

Rowley acknowledged that inventory levels among retailers and manufacturers are higher than desired. He reasoned that polished diamond demand has slowed as consumer demand has been softer than anticipated throughout 2015, while the strength of the U.S. dollar impacted demand in non-dollar denominated consumer markets.

Shah, who is also the CEO of Asian Star, a Mumbai-based diamond manufacturer, appealed to the mining companies to be sensitive to the pressures faced by manufacturers. Rowley responded that De Beers has been more flexible in its rough supply to sightholders, and continually adjusted its rough prices based on prevailing market conditions in the first half of the year, while taking a long-term, sustainable view on pricing.

While manufacturers reduced their rough buying in July and August, Shah stressed that the Indian diamond industry maintains a positive outlook and expects to open its special zone for rough trading in the coming months. The zone was scheduled to open in July but was delayed due to tax requirements requested by the mining companies set to operate in the zone. Commerce secretary Teaotia said the government hopes to announce reasonable and rational tax norms for the industry in due course.

Meanwhile, the Indian market was more focused this week on selling its polished diamonds with the hope that IIJS will help improve sentiment. Shah pointed to the expanded show as a sign of confidence in the industry.

“We do not anticipate any major growth curves in the next few months and we can safely predict a stable outlook for the Indian gem and jewelry industry,” he said. “We believe in a long term perspective and IIJS will provide the industry with the much needed vigor and positivity to gear up for better times ahead.”

The show runs through August 10 at the Bombay Exhibition Centre in Mumbai.

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Tags: Avi Krawitz, De Beers, diamonds, gold, IIJS, India, jewellery, Jewelry, Rapaport
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