Amid low demand, Indian diamond companies reduce imports to keep prices stable: Report

Diamond companies in India are making efforts to cut imports to keep prices stable, amid a plunge in demand due to the COVID-19 pandemic.

Over 2,000 large and small diamond firms in India have asked global miners Alrosa and De Beers to defer supply and prevent panic buying, The Economic Times reported.

Moneycontrol could not independently verify the story.

Trade bodies have requested exporters to delay purchases and exercise caution while procuring fresh roughs from overseas miners, the report said.

"The advisories from various trade bodies were useful in reaching out to miners to explain them the need to cut supply. As a result, speculation died down among customers and retailers while diamond exporters had some breathing space to lower inventories," Sanjay Shah, Senior Director, KBS Diamonds, told the paper.

Bharat Diamond Bourse, Surat Diamond Bourse, Surat Diamond Association, and The Mumbai Diamond Merchants Association have contacted their members to stabilise the market, the report said.

"Commodities across the world, including oil, have fallen but diamond prices have been stable till now. It was a function of a conscious decision by Indian diamond houses to cut down import of rough stones so that businesses can lower their inventories, prune debt, and manage cash flow," Colin Shah, Chairman of Gem & Jewellery Export Promotion Council (GJEPC), told the publication.

During the Second World War in the 1940s, London-headquartered De Beers had made the controversial decision of holding back supply.