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Dilip Mehta: “Fundamentals for the diamond industry remain strong. However, immediate future will be unclear due to unpredictable economic outlook in the short term.”

30 july 2012

Dilip Mehta, CEO of Rosy Blue, a long-time DTC sightholder and one of the world’s largest diamond manufacturers having close relationships with all the major mining houses, including De Beers and ALROSA, described the current state of the diamond market in his interview to our correspondent in Brussels.

How did you work before and how do you work now?

There have been some remarkable macroeconomic changes impacting the diamond industry. With perceived shortages of rough supplies (in carats) the rough market overtook the polished way beyond what is sustainable. The impact is serious on the smaller sizes and especially in the better qualities. Similar issue exists in high colors and clarities larger sizes. This has impacted the entire industry leading to high stocks and liquidity issues.

Are there any prospects for the diamond market as a whole?

Fundamentals for the diamond industry remain strong. However, immediate future will be unclear due to unpredictable economic outlook in the short term.

What kind of development trends do you see for the diamond industry and market nowadays?

Due to high cost of doing business (China, India) retailers are under pressure and are downtrading rapidly due high polished prices.

Is it possible to forecast prices?

Forecasting prices is possible. One needs to measure the supply demand and above all liquidity. Based on that it is possible to forecast. That said, market moods plays an important role.

What impact on the market and business is produced by new diamond miners (Zimbabwe, etc.)?

There has been not so much of new production of late with exception of Zimbabwe. Due to the nature of diamonds coming out from Zim, the lower color larger goods are under pressure. Interestingly, those diamonds are selling due to increasing demand in the lower color and qualities.

What are the prospects for the sightholder community as a sales system?

Sightholder system almost guarantees supply and that has been fairly consistent. However, the biggest flaw in the system is the lack of price agreement.

How do you feel about the transfer of DTC to Botswana?

Besides some logistical challenges, it seems that it will be business as usual.

Alex Shishlo, Editor in Chief of the European Bureau, Rough&Polished