Indian media reports that diamond companies are offering 5 percent to 20 percent discounts in the wake of the Antwerp Diamond Bank’s pending closure are “false and baseless,” said a statement by the Gem & Jewellery Export Promotion Council (GJEPC), the umbrella group in India.
“Closing of ADB does not have any immediate direct impact on the trade [nor] has it created an overnight liquidity crunch,” the statement said, noting that banks do not shut down accounts overnight, and ADB is giving clients a one-year minimum to look for alternate financing.
Indian companies “are not expected to offer steep drop[s] in price in near future or resort to any distress selling,” the statement said. “There is currently no reason for [that].”
The group was responding to a pair of reports in local newspapers. The Hindu declared the industry had “gone on a discount spree” due to a “severe liquidity crunch,” pegging the discounts at between 5 percent to 20 percent. The Times of India said the price drops ranged from 3 to 7 percent and said dealers want to liquidate inventories ahead of the Diwali holiday.
But the GJEPC responded that the mood of the Indian industry remains upbeat, noting that the U.S. market is on the rebound, and Europe is steady.
“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 emerging markets of China and India,” said council chairman Vipul Shah in the statement.
He noted that DTC rough price recently rose 3 percent to 5 percent, while the price of Alrosa goods witnessed an increase of 2 percent to 5 percent.