According to data recently released by the Gem & Jewellery Export Promotion Council (GJEPC) of India, the total import and export value of natural diamonds in the first three quarters of 2024 (January to September) fell by approximately 15% and 23%, respectively, compared to the same period last year. The total import and export volumes (in carats) also decreased by 8.9% and 16.4%, respectively.
Key Figures
Rough Diamond Imports
- September 2024: $779 million, down 24.62% year-on-year (YoY)
- July-September 2024: $2.364 billion, down 31.53% YoY
- January-September 2024: $9.904 billion, down 14.77% YoY
Rough Diamond Import Volume
- September 2024: 8.78 million carats, up 10.92% YoY
- July-September 2024: 22.15 million carats, down 29.17% YoY
- January-September 2024: 89.67 million carats, down 8.87% YoY
Polished Diamond Exports
- September 2024: $1.291 billion, down 22.87% YoY
- July-September 2024: $3.235 billion, down 23.12% YoY
- January-September 2024: $10.939 billion, down 22.53% YoY
Polished Diamond Export Volume
- September 2024: 1.53 million carats, down 18.71% YoY
- July-September 2024: 4.11 million carats, down 20.17% YoY
- January-September 2024: 13.49 million carats, down 16.37% YoY
Analysis
1. Improvement in September
September showed notable growth compared to August in both import and export values (in dollars) and volumes (in carats), indicating a slight recovery in trade for that month. Both upstream rough diamond demand and downstream polished diamond demand saw increases, marking a positive development. However, compared to September last year, there was still a decline across three metrics, with only the rough diamond import volume showing a 10% increase. The drop in export values suggests that the downstream market for natural diamonds has shrunk by about 20% over the past year.
2. Q3 Year-on-Year Decline
In Q3, both the import and export values and volumes saw year-on-year declines, with imports decreasing more significantly than exports. This "lesser imports, more exports" trend supports the industry claim that the midstream sector has been clearing out inventory. Tracking quarterly changes in export data—both value and volume—remains essential, especially as Q1-Q3 declines may reflect broader challenges for the natural diamond industry.
3. The Decline in Gross Profit Since 2021
Observing the data from January to September, it becomes evident that the "overall gross profit" of India's natural diamond industry has been shrinking consecutively since 2021. Gross profit (calculated as "export value minus import value") has dropped from $4.8 billion (2021) to $3.9 billion (2022), $2.5 billion (2023), and just $1 billion in 2024. Likewise, the import and export volumes have trended downward, with rough diamond imports decreasing by 32% and polished diamond exports by 43% compared to three years ago.
Although this calculation may not be entirely precise, it offers a rough picture of the industry's trajectory. Recent news of job losses and even suicides among diamond cutters points to the severe challenges currently facing India's natural diamond industry. Publications like The Times of India have reported that many factories, in a bid to survive, have either cut worker hours and wages or shifted to polishing lab-grown diamonds.
The natural diamond industry's concept of "less is more" reflects both a proactive market regulation strategy and a passive adaptation to current circumstances.
Looking Ahead
India, as the "midstream hub" of the diamond industry, often acts as a barometer for the global supply chain. This is why continuously tracking India's diamond data remains crucial.
Recently, trade publications and major players have expressed optimism about the Q4 downstream market. At a recent conference at the Mumbai Diamond Exchange, analyst Paul Zimnisky stated that "the natural diamond industry is not without hope, and markets like India will play a role in driving growth." These statements provide a much-needed boost for the industry.
While we have yet to see data supporting a full market recovery, ongoing investments in generic marketing by De Beers, the Natural Diamond Council (NDC), and other stakeholders, combined with the cyclical nature of the economy, suggest there is no need to be overly pessimistic about the industry's long-term prospects.
History tends to rise in spirals—if the world becomes more peaceful, perhaps the path forward will also become a little smoother.