The move is aimed at reducing production amid declining global demand for diamonds. | Representative image
Sura: Surat Diamond Units have decided to halt operations for 10 days from August 18 to reduce inventory levels as exports to key markets China and the United States are failing to pick up. The decision to close comes after China switched to buying only gold since the onset of COVID-19 and the United States reduced its purchases of natural diamonds.
As a result, around 500 small cutting and polishing units in Gujarat have ceased operations, resulting in job losses for 70,000 to 75,000 workers. AND According to union sources, these units were earlier supplying their products to major exporters in Surat and Mumbai, who then shipped them to international markets.
Typically, diamond factories in Gujarat take extended breaks during Diwali. However, announcing a shutdown at the beginning of the year is aimed at reducing gem production. The industry hopes that this strategy will control supply and push up prices, which will benefit the industry as a whole. The diamond sector is currently going through a period of low demand, with a noticeable decline in global demand for polished diamonds.
Surat experts point out that the global diamond market is very sensitive to international factors, as 95% of polished diamonds are exported. The current conflict between Russia and Ukraine and the situation between Israel and Palestine are some of the key issues affecting diamond sales.
Jagdish Khunt, president of the Diamond of Surat The Association noted that these conflicts have significantly affected global demand for diamonds and the jewellery sector in general. “In 2022, the turnover of our diamond industry was nearly Rs 225 billion, but now it has fallen to around Rs 150 billion. We have been in decline for the last two years,” The Hindu he quoted him as saying.
Other challenges include sanctions imposed by the United States and the ban by G7 countries on Russian diamonds. Russia, a major supplier of rough stones, has left the Surat industry with substantial inventory levels. Global diamond mining company De Beers also announced a 15% reduction in rough stones. diamond production for the second quarter ending in June, citing excessive inventories as the reason.
In response to the crisis, the Surat Diamond Workers Union has recently launched a helpline for people affected by job loss or financial difficulties. Since its launch, the helpline has received 1,600 calls for help from people who have suffered job losses or wage cuts. Industry representatives are urging diamond factory owners to provide support to workers and their families to help them get through this difficult period.
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