Despite continued inflationary pressure on diamonds, retailers expect a steady improvement in consumer sentiment and growth for diamond jewellery during the upcoming festive season.

“We expect a healthy growth in the upcoming festive season, as there is pent-up demand in the market,” said Ahammed MP, chairman, Malabar Gold & Diamonds. He added that the consumer sentiment is steadily reviving and the same will reflect in the sales during this festive season.

Suvankar Sen, MD & CEO, Senco Gold & Diamonds said that while there is upward pressure on diamonds, but due to lowering of demand, the industry might see stable prices. He added that the retailer is hoping for improvement during the festival season.

The entire diamond industry is presently facing challenges in the form of limited supply of rough diamonds and higher prices. Commenting on the same, Ahammed MP said that if the supply of rough diamonds continues to linger and rough diamond prices remain elevated, it will impact the retail prices of diamond jewellery.

Sharing his thoughts on the challenges of the diamond industry, Sen said, “Due to the ongoing inflation pressure along with lower disposable and discretionary income, we are seeing pressure on diamond jewellery this year.” He further added that limited weddings this season are also impacting sales of diamond jewellery.

When asked about the impact on consumer demand due to increasing diamond prices, Malabar’s Ahammed MP highlighted that there is inflationary pressure on consumer wallets and at the same time jewellers are not in a position to absorb part of the production cost. Consequently, an increase in diamond jewellery price is expected to impact volume-based purchase.

Amit Pratihari, general manager, De Beers Forevermark, last month told ETRetail that as a result of sanctions on Russia and overall shortage of diamonds in the market, the prices of diamond jewellery will definitely go higher, however won’t have a significant impact on consumer demand.

As per a recent report by Crisil Ratings, revenue of the Indian diamond industry is set to witness a fall of 15-20 per cent to USD 19 to 20 billion this fiscal year. The report highlighted lockdowns in China, inflation, and opening up of other avenues of discretionary spending as the key factors hampering the demand for diamond jewellery. Additionally, sanctions on Russia’s Alrosa have cut supplies of rough diamonds by almost 30 per cent and contributed to a significant rise in prices, said the report.

Courtesy: ET Retail