Diamonds to cost 25-30% dearer as sourcing becomes tough

MUMBAI: The new year may bring little cheer to the diamond industry as shortage of rough diamond would make the precious stone dearer by 25-30 per cent.

Diamond Trading Company (DTC), London-based distribution arm of De Beers Group and the biggest supplier of rough diamond stones to the industry, has decided to prune eleven Indian sight holders from its clientele for for three years from 2008-11, which is expected to make sourcing of rough diamonds difficult for the Indian industry, a top industry official said here.

"The retail diamond price may go up by 5-10 per cent and big-size diamonds, whose availability is less, may go up by 25-30 per cent following the DTC's decision to remove 11 Indian companies from its list of sight holders and it will make sourcing of rough diamonds difficult," Gem & Jewellery Export Promotion Council Chairman Sanjay Kothari told reporters here today.

Sight holders are the clients or buyers of DTC and are authorized for bulk purchase of rough diamonds.

DTC has decided to remove eight Indian companies and three Belgium-based Indian companies. From the present 94 firms, 75 will receive regular supplies of rough diamonds from DTC for a three-year period beginning next year.

Kothari pointed out that DTC's move will consolidate the business in a few hands only, as small and medium enterprises dependent on rough diamond supplies through intra-trade dealings with sight holders will discontinue.

This could affect the manufacturing activity and lead to massive unemployment in the sector.