News from Mumbai
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14th October 2009
Dear Friends
With the Diwali holidays fast approaching, it seems surprising that Indian manufacturers want to buy more rough and stock up. However, surprising though it may seem, it makes good business sense for a number of reasons.
First, the announcement by Varda in her speech during the Hong Kong Show, that availability is likely to be lower and also that next year's sales will be at the same level as this year. A theme later repeated by other DTC executives.
Second, the much improved polished sales into the Indian market, sales of large sizes (30 pts to 3 carats) during the Hong Kong Show and anticipation of growing US demand during the coming season.
With the short to medium term outlook on rough supply pointing to a scarcity, rough demand has picked up and the majority of DTC's boxes are quoted at strong premiums. Most Indian Sightholder-Manufacturers are concerned about their rough supply being affected by a shortfall in their ITO. Post Diwali holidays, many important manufacturers plan to re-open their factories immediately, in anticipation of strong orders for the Christmas season. Generally, polished demand has been strong especially in I2 and I3 qualities of Pique Polished, and many large diamond companies are holding less stock of these qualities.
What everyone is concerned about at the moment is the price of gold, which is at an all time high. While most jewellery consumers are postponing their purchases, preferring to wait for a correction in the price, the only buyers are those buying for special occasions like weddings, etc.
Another major concern is the strengthening of the Rupee against the US Dollar. So far, the Reserve Bank of India has not stepped in to curb this trend. However, this may result in stock loss.
The delayed payments from overseas customers are still a major concern for many big companies, with payments from US forming the bulk of over dues.
However, it is certain that the market sentiment and situation is much better than it was this time last year. I hope that this upbeat mood remains strong after everyone comes back from an enjoyable Diwali holiday.
On behalf of all at Goldie International, I take this opportunity to wish all our readers a Very Happy Diwali and a Prosperous New Year.
With warm regards
Sharookh Kocheck
Chief Executive Officer, Mumbai