Diamond factories of Surat have resumed operations from Monday after a recession-induced Diwali vacation of 36 days — the longest ever. All diamond factories are expected to become fully operational by the first week of December, say traders and businessmen.
The office of the Surat Diamond Association also reopened on Monday.
Generally, Diwali vacation in the diamond industry lasts for 20 days. However, due to the poor demand for diamonds in the international markets, especially in the US, the workers were sent on vacations early this year; October 21 was the last working day for the Surat factories.
“There is a momentum found in the market as diamond factory owners have started receiving orders from Mumbai traders. Until November 30, over 50 per cent of the factories of natural diamonds will open, and by the end of the first week of December, almost all the diamond factories will start functioning. The diamond trading markets in Surat’s Mahidharpura and Varachha were open Monday,” Surat Diamond Association president Jagdish Khunt said, hopeful that the sector will slowly pick up its lost momentum.
According to Surat Lab Grown Diamond Association president Babubhai Vaghani, over 30 per cent Lab Grown Diamonds (LGD) factories have started operation as demand has picked up. “By the month-end, a majority of the factories will be operational. There was good demand in domestic sales a few days before the start of the Diwali vacation. The diamond traders and manufacturers have started receiving orders not only from the domestic market but also from the international market. The orders for the Christmas sale in the US have started,” he said.
The increase in demand has led to a fall in the prices of LGD by as much as 40 per cent compared to last year. “The price of a one-carat lab grown diamond was between Rs 25,000 and Rs 30,000 last year. The same in the current year is between Rs 15,000 and Rs 20,000. The reason behind the drop in prices is overproduction. Many new players have entered the diamond industry and a healthy competition is observed in the market,” said Vaghani.
“Our business was around Rs 1,000 crore during the last financial year. This year, we crossed the figure before Diwali. This year, many new players have entered the industry. Now, LGD has entered all the jewelery retail markets across India. We have also found a rise in the use of LGD in jewelery in the domestic market. At the same time, over 60 per cent of the market is consumed by the US,” an LGD factory owner Smit Patel said.
