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As a result, lockdown measures will have to be imposed in nations throughout the globe. The travel and border restrictions harmed diamond mining, manufacturing, and supply chain. Due to border restrictions, almost all imports and exports were suspended, and artisans responsible for cutting and polishing raw diamonds were forced to stay home. Miners were subjected to social distancing restrictions and required hygiene procedures to maintain the mining industry’s relevance.
A reduction in demand for luxury goods was expected as the epidemic spread, given the urgency of the fight for life. According to De Beers’ March sales report, revenues in 2020’s second sales cycle (12 sales cycles every year) decreased 28% from $496 million to $355 million. Although the lockout harmed the market, De Beers refused to lower their pricing to control their stock levels; instead, it stopped production, allowing the diamonds to accumulate, all to protect the market and its worth. India’s raw diamond imports fell to $1 million in April from $1.5 billion in February, despite having the world’s greatest concentration of polished diamonds. In addition, shipments of polished diamonds decreased by 26% from one year earlier (from $2.18 billion in August 2018 to $1.64 billion in August 2020).
The price of a one-carat diamond fell by 9.7% in the first quarter of 2020 and by 13.1% year on year, according to RapNet Diamond Index (RAPI), the industry’s standard for diamond pricing. The price of a 0.50-carat diamond fell by 4.9% in the first quarter of 2020 and fell by 9.5% year on year. Artisanal, small-scale, and large-scale mining activities in Africa were all affected, but the smaller businesses were the worst hit. Diamond exports from Guinea fell dramatically in the first quarter of 2020, from around 270,000 carats in January to 39,494 carats in April. Since the lockdown started, Cameroon has not exported any diamonds.
Under these conditions, it was understandable that unscrupulous customers would try to take advantage of the situation by purchasing items at rock-bottom rates. Zimbabwe, for example, saw the price of a one-carat diamond drop from SSL 5,000,000 to SSL 2,500,000 after the epidemic, a 50% decrease in price. We realized that many of our regular customers did not have the money to make purchases. Consequently, miners were obliged to sell to these new illicit players at a halved price because they were desperate. When trade restrictions were lifted, these crooked consumers may have been accumulating diamonds to sell them at a profit.
Many of these artisanal miners were compelled to give up mining in favor of other businesses, such as agriculture, because of the dramatic fall in profitability and labor restrictions.
Diamond manufacturers and merchants are concerned about the decline in prices, but it looks to be the ideal time for diamond purchasers. Confident, affluent investors have grabbed the opportunity to obtain large, high-quality diamonds as the lockdown in some countries is gradually being erased. Illicit companies seek and stockpile artisanal diamonds, which they hope to sell at a profit once international supply constraints are alleviated. While diamond mining businesses like De Beers and Alrosa were concerned about the Covid-19 problem, they defended their diamond markets. Because they refused to lower their pricing to control their inventory, the diamonds accumulated. To keep the market and its value safe, they’ve sought to limit the supply of raw diamonds, according to Gemdax partner Anish Aggarwal.
De Beers agreed to decrease the price of their diamonds after the outbreak paralyzed the diamond sector. They lowered the cost of their larger-carat raw diamonds. De Beers reported an 11 percent year-over-year gain in sales of $320 million in August, attributed to an increase in the diamond market. As a result, they experienced the most significant amount of sight purchases since January, as rough demand rises ahead of the Christmas season. The Covid-19 outbreak is currently the focus of manufacturers, producers, and merchants across the supply chain. They also have plans to develop, help the artisanal diamond sector, and tighten loopholes for illicit dealing. They also want to expand, support. As the pandemic dies down, some countries are easing their restrictions on Covid-19. Production in India has restarted at half capacity, and Chinese stores have reopened. According to the country’s official statistics, Belgian polished exports grew by 6 percent year-on-year in August as demand grew. Increased sales are seen by retailers that can transition to online trade and commerce.
Diamond miners in numerous countries are exploring new and innovative approaches to preserving the diamond industry. Compared to prior months, there now seems to be evidence of recovery in trade and a slowing down of diamond price declines. Every supply chain actor is looking for new methods to revive sectors left behind or crippled, such as the artisanal and small-scale diamond industry. Illegal and exploitative trade is also being eradicated. India’s manufacturing has risen by 50%, while China and Belgium’s trade has reopened.
Increased demand for diamonds and a resurgence in jewelry sales are the two most important factors determining whether the diamond industry can fully recover.