News from Mumbai
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9th January 2012
Dear Friends
Firstly, may I take this opportunity in wishing all our readers and well wishers a very happy & a prosperous New Year 2012.
Post New Year celebrations majority of our Diamaintaries started on a positive note and even though at present the Indian diamond industry is still facing serious problems, a liquidity crunch, a weak rupee, a lack of profitability after manufacturing as well as a lot of Zimbabwe rough diamonds in Surat, which has been actively traded. Still many companies feel that all these problems will soon be part of history as demand for DTC rough will open up and profit will return to manufacturing.
Those initial reports from the USA about the season are very positive and the trend for the second half of this year definitely shows more strong indicators but all of this dependent of whether the Euro crisis can be brought under control.
Just before Christmas there was a major announcement by DTC concerning the long awaited results of the new contract period from 2012-2015 and the outcome especially the deletion of 4 companies has left many stunned, surprised and uncomprehending in the Indian Sightholder community.
There are new provisional additions of same number of Indian companies making it to the list but DTC has made it clear that after the 3rd party verification all names will be confirmed before April 2012.
Before the announcement DTC had continuously informed every Sightholder that in the next contract period they would have less number of carats to sell as in the earlier results of 2007 when they had ongoing contract with Russia which no longer exists. The sale of a few important mines has reduced production and the beneficiation agenda in Southern Africa has also significantly reduced the rough available to Sightholders in general.
In a way the current situation reflects the continuing strength of the Indian industry in relation to the DTC’s much less prominent supply capacity and these results represent a challenge to the Indian industry as to how to protect its own future interests, as well as to the DTC whose own position in relation to India becomes more and more unclear.
With warm regards
Sharookh Kocheck
Chief Executive Officer, Mumbai