Meltdown may cause diamond price volatility, warns IndiaNovember 3rd, 2008 - 7:13 pm ICT by IANS
New Delhi, Nov 3 (IANS) India Monday warned global diamond industry leaders that following the global slowdown, the diamond industry would be adversely impacted and there could be tremendous volatility in rough diamond prices during the next couple of years.“We must accept that in the next year or two, we will see tremendous volatility in rough diamond prices,” said Jairam Ramesh, India’s Minister of State for Commerce and Power, at the four-day Kimberley Process Certification Scheme (KPCS) global summit which got underway here Monday.
KPCS is a global body under the United Nations (UN) to curtail the trade in “conflict diamonds” that are illegally mined and used by rebel groups to finance wars.
Nearly 350 delegates from over 45 KPCS member-nations are participating in the deliberations, which will discuss various issues related to diamond certification.
“We are meeting against the backdrop of a global financial crisis. We have seen in the last month alone that some major primary producers have reduced selling prices of most of their rough assortments by between 35 and 50 percent,” Ramesh said.
“It is an academic issue whether this steep reduction represents a technical correction, a temporary phenomenon, or whether it actually signals a trend,” he said.
“From a Kimberley process perspective, however, we must accept that in the next year or two, we will see tremendous volatility in rough diamond prices. Moreover, in the absence of perfect information flows, we may see significant price differentials of rough traded in different countries.”
“The global recession will have a negative impact on the diamond industry if the crisis persists. At present, there can be country-specific impact, and but that is not so obvious,” said Joseph S. Iita, Permanent Secretary, Ministry of Mines and Energy, Namibia.
“We need to be vigilant to ensure long term sustained growth in the industry. The world economy is indeed passing through a bad time,” Iita told IANS on the sidelines of the KPCS summit.
Agreed G.K. Pillai, Secretary, India’s Ministry of Commerce and Industry: “The global financial crisis will affect the industry, and the world community need to work together to check any such situation.”