Mr. Mehul Shah, vice president of Bharat Diamond Bourse (BDB) will share a few insights about the current scenario and the future of the diamond industry. He shares his thoughts on reduced demand for diamonds, factors affecting the diamond market and measures to increase demand and bring back prosperity in the market again.
Q. Do u think in the current market situation margins are under tremendous pressure?
A. The current market scenario, I really think that the margins are under tremendous pressure and will surely continue to last for quite a sometime
Q. What reason do you see with the current slowdown of the market?
A. There are a couple of motives that have led the market to slow down. One of the most important factors is that people need to be disciplined, which is not seen in people today. Also despite the traders were provided by finance from financial institutions, there is a sense of overtrading in the market. In addition to this, people kept on manufacturing without actually understanding the demand in the market. This negatively affected the market sentiments. This market condition could be corrected by reducing the production and supply of rough diamond.
Q. What more needs to be done in terms of getting sales and marketing natural diamonds?
A. Various kinds of promotional schemes shall be implemented to improve market conditions. The promotional scheme is the need of the hour to increase marketing and sales of diamonds. Currently, Diamond Promotion Association (DPA) is aggressively engaged in promoting and marketing of diamonds. However I personally feel, it will be a gradual process to improve the market conditions despite all efforts from the association.
Q. What are your plans to counter CVD & do you think BDB should allow trading of these?
A. We, BDB and other trade bodies are working together to build up consumer confidence and generic promotion of diamonds for CVD or synthetic diamonds. DPA is actively involved in this and promoting diamonds all over the world. And certainly, at BDB and other trade bodies we are trying our best by talking to other people and are trying to understand the situation. We are trying our best by discussing the matters with the government as well. However we have not yet taken big steps, but we are trying hard for promoting the diamonds. BDB, as well as other trade bodies, are continuously working on promoting the diamonds. With regards to CVD, you are aware that BDB is the only bourse in the world where synthetic trading and synthetic diamonds were banned in this complex. Currently, there are no plans of uplifting the ban on CVD and synthetic diamonds.
Q. How do you see the current market challenges & what are your plans to tackle it?
A. Presently there a lot of challenges in the market of which the major one is the profitability. There is a slowdown in the business and our profits are eroding. There is one constant problem of bankruptcies in the world markets based on which customer confidence as well as demand, both are getting lost. One good thing is that to produce lesser diamonds, factories will be run on a comparatively lower capacity which will reduce our variable costs. Unfortunately, a lot of workers and assorters are losing their jobs or going out of the industry. However, we expect a lot of young minds to join our industry to modernise our markets.
Closing statement
We would like to thank you for your time and valuable insights. Those were really very helpful and we expect that the diamond market is slow-moving. However, with the efforts put in by various trading bodies, the boom in the diamond market seems no far.
