Part 2: KPCSC wants Russia to help end impasse on new definition of conflict diamonds

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25 october 2021

Part 1: KPCSC gives insight into illegal diamond mining, trading in Africa

Although the diamond watchdog Kimberley Process (KP) prides itself for significantly reducing the flow of conflict goods since its establishment in 2003, the Kimberley Process Civil Society Coalition (KPCSC) alleged that illegal diamond...

18 october 2021

The jewelry industry in Russia needs to be upgraded in a serious way

Dina Nasyrova is a vice-president of the International Jewelry Exhibition-Congress J-1 recently hosted by the Atrium of Gostiny Dvor in Moscow. As a partner and the Muse of the famous jeweler Ilgiz Fazulzyanov, she actively participated in the preparation...

11 october 2021

Smiling Rocks, a philanthropic business model, inspires companies to work for betterment of the world

Zulu Ghevriya, the CEO and Co-Founder of Smiling Rocks, Founder of Vedantti Jewellery and Managing Director of Prism Group has been in the diamond and jewellery industry for over 20 years. Zulu started his business, Prism Group, as a natural diamond...

04 october 2021

Work hard and you will find success

Eduard Utkin, Director General of the “Jewellers’ Guild of Russia” Association, expert of the RF Chamber of Commerce and Industry’s Committee on Precious Metals and Precious Stones, told R&P about implementing the SIIS PMPS (State Integrated Information...

27 september 2021

ICRA revises credit outlook on Indian diamond industry to ‘negative’

27 february 2020

ICRA Limited (ICRA), independent and professional investment information and credit rating agency of India, has revised the outlook on cut and polished diamond (CPD) industry to ‘Negative’, given the ongoing lockdown in parts of China and Hong Kong. 

Image credit: gr8effect (Pixabay)

While China accounts for about 14% of polished diamond consumption, more than 35% of the exports from India are currently routed via Hong Kong. A continued lockdown in business at China and Hong Kong is likely to aggravate the pressure on the cash flows for the industry, especially in the backdrop of cautious lending to the sector.
According to ICRA, the credit profile of cut and polished diamond exporters will be adversely impacted if the Coronavirus related lockdown sustains beyond February 2020. Also, сash flow will be impacted with the stretch in the working capital cycle on the back of delay in collections and inventory build-up. As a result, this could pressurise an entity’s liquidity position and may lead to distressed sales, which will not only hurt its profitability but will also negatively impact the polished diamond prices. However, the extent of the impact on Indian CPD companies is likely to vary depending upon their exposure to China/Hong Kong.
ICRA also points out that China is currently a large exporter of diamond-studded jewellery to the US and other key markets. And, with Chinese factories operating in low capacity utilization currently, such manufacturing may be diverted to India for a short period of time. However, if the Chinese shut-down sustains for two more months, say until April 2020, then it could lead to elevated inventory levels for the Indian industry.

Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough & Polished