Diamond manufacturers in Surat, Amreli, Bhavnagar and Ahmedabad in Gujarat, India’s westernmost state, have decreased their production capacity by half, according to a report in Times of India quoted in IDEX Online. The production cut since January “is estimated to be worth $4.2 billion”, according to the report.
The sharp falls is driven by “a sharp fall in prices of polished diamonds and to prevent the build-up of excess inventory in a slow, depressed market”. The same report says that melee prices “have fallen as much as 25% since the beginning of this calendar year”. In addition, about a fifth of the 4,000 diamond polishing plants in Gujarat have not reopened after the recent summer vacation, and small factories have shut down 80% of their polishing machines.
The reports quote Surat Diamond Association (SDA) president Babu Gujarati as saying that “demand of polished diamonds in the global market is very poor due to the trade war between China and the US. Further, the rough diamond prices are at an all time high, which has reduced the profit margin of the polisher”.
