Last Updated : 30 July 2010 at 18:15 IST

Surat’s diamond units pin hope on Christmas

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SURAT (Commodity Online): With reports appearing in European media that blood diamonds from Zimbabwe are making way to Surat’s diamond polishing units, India’s diamond city is worried about its image in the global market during the coming Christmas.

However, the diamond city is gearing up for the Christmas season with good reports from the US markets giving a fillip to their hopes. Surat’s diamond industry is planning to buy diamonds from Zimbabwe following the KP scheme’s partial permission to the African nation to sell their diamonds. So, Surat diamond units are set to import diamonds from the Marange mine in Zimbabwe.

It may be recalled that the Indian diamond industry has been experiencing shortage of rough diamonds for a long time. Hit hard by the 18-month recession, the 4,500 units in the India’s diamond city reduced inventory and ordered roughs only as per the demand.

The demand upswing and emergence of other countries like China and a few in the Middle East as diamond processors, led to a short supply of rough stones. Now, with new sources being added, the situation is likely to be eased.

The world’s diamond cutting & polishing hub Surat passed through its worst phase during September 2008 to March 2009 following global recession and almost zero demand from the largest diamond consuming market US.

However, since March 2009, the industry is continuously witnessing growth in demand and all the 4,500 units restarted production by September 2009. The city has around 4.50 lakh diamond workers.

World’s biggest diamond mining company De Beers reported 133% increase in the production across its operations to 15.4 million carats in the first half of the calendar year 2010, up from 6.6 million carats during the same period last year.

According to industry leaders, prices of rough diamonds have increased by more than 25-30% in the last one year. The prices are now at the pre-recession levels of June 2008. Apart from US, India, China and Middle-East have also become emerging markets for diamonds.