DTC removes many Indian cos from buyers list for 2008
THE diamond industry, which is reeling under the impact of appreciating rupee, is headed for more trouble that could adversely affect rough diamond supplies. Diamond Trading Company (DTC), distribution arm of De Beers Group, has removed several Indian companies from its list of sightholders for the next three years starting 2008. Sightholders are the clients or buyers of DTC and are authorised for bulk purchase of rough diamonds. Though DTC sightholders list will be official by March, around five to 10 Indian companies have been excluded with a couple of new ones added in the 2008 list. A prominent player in diamond industry on conditions of anonymity said in next five to seven years only 15% to 20% of the current cut and polished diamond business would be left in the country as there would be serious supply problems of rough diamond. "The only option for the Indian companies will be to move their units to Africa," he said. More than a dozen Indian companies have already moved their units to Africa, he added. According to the figures by Gem and Jewellery Export promotion Council (GJEPC), imports of rough diamond fell by over 48% in November at 96.31 lakh carats valued at $532.38 million against 185.6 lakh carats valued at $906.2 million in November 2006. The imports between April to November fell by 3% at 1,085.04 lakh carats valued at $6,278.3 million against 1126.32 lakh carats valued at $5530.42 million in corresponding period last year. However, because trading activities are gradually shifting from Antwerp to Dubai and India, the exports of cut and polished diamonds have gone up. Exports of cut and polished diamonds rose to 30.07 lakh carats in November valued at $912.09 million against 22.04 lakh carats in November 2006 valued at $696.94 million. Between April to November, it rose to 261 lakh carats valued at $8,526.35 million against 211.45 lakh carats valued at $6,351.03 million between April to November 2006. According to an official from Livingstones, one of firms to be delisted, there would be problems in sourcing. "We would have to source now from the open market where price is expected to be higher then what we were paying to DTC," he said. There may also be problems of availability and quality, he added. DTC recently announced 79 sightholders of which 75 will be offered supply through DTC London and DTC South Africa and rest four will receive sights through new independent joint-venture operations-DTC Botswana and Namibia Diamond Trading Company, selling rough diamonds to clients in Botswana and Namibia for the first time. During the previous contract period (2005-07), DTC sold all of its rough diamonds to approximately 93 clients entirely through DTC London which offered sights in London and Johannesburg. According to industry sources, around 40% to 50% of rough diamond supplies by DTC come to India and more than 50% of its sightholders are from India. However, Ashish Goenka from Suashish Diamonds said that supplies from DTC to India would still remain the same. "The cake is still the same, the players have changed. India remains a very important centre for DTC and they have always supported the Indian diamantaires," Mr Goenka said. He added that DTC has followed a very rigorous and thorough robust process in assessing its customer list. Suashish are the DTC sightholders in India and Botswana. Mr Goenka said trading aspect of the sector will also pick up alongwith the manufacturing side. Exports from the gem and jewellery industry fetched $ 17.1 billion in 2006-07 against $16.64 billion in 2005-06, showing a growth of 26% with diamonds accounting for 64% of the total exports.