19.01.2023, 07:48
Diamond shipments from Russia to India have plummeted due to currency risks
Source: OREANDA-NEWS
OREANDA-NEWS Supplies of Russian diamonds to India have fallen by 40 percent since April, and Russia cannot yet increase exports due to currency risks, Bloomberg writes, citing the words of Vipul Shah, chairman of the Indian Council for the Promotion of the Export of Precious Stones and Jewelry.
"No one wants to take on the risk and volatility associated with currency exchange. Russians are not yet satisfied with issuing invoices in rupees when trading in precious stones and jewelry," Shah explained. According to the Council, so far not one Indian jewelry company has been able to use the payment mechanism in rupees created in July for barrier-free trade between the two countries. At the same time, the organization is in constant dialogue with the governments of both countries and Russian companies in order to increase the supply of precious stones. India is considered one of the world's largest diamond processing and cutting centers, and Russia accounts for a third of all global diamond supplies. Due to Western sanctions, financial settlements between the two countries became more complicated, and chaos ensued in the market, as cutters and traders were looking for ways to continue buying Russian diamonds even if banks refused to finance operations. But in general, the situation with supplies has not improved, payments are not going to Russia, the Shah said.
At the same time, despite a certain shortage of diamond supply, there is also a reduced demand for diamonds (processed diamonds) in the world from the side of key importers – China and the USA. Against this background, the export of diamonds from India in the period from April to December fell by 7.7 percent in annual terms to $ 16.6 billion. According to Shah, so far the supply restriction in the market remains insignificant, but the real problems will begin when demand growth resumes.
An unexpected beneficiary of problems with the export of Russian diamonds was Botswana, which ranks second in the world after Russia in terms of production of this mineral. Thus, the surplus of the state budget of Botswana in April-September amounted to 598.7 million pools (46.9 million dollars), which was largely made possible due to an increase in export revenues from the sale of minerals by 66 percent, primarily diamonds.
"No one wants to take on the risk and volatility associated with currency exchange. Russians are not yet satisfied with issuing invoices in rupees when trading in precious stones and jewelry," Shah explained. According to the Council, so far not one Indian jewelry company has been able to use the payment mechanism in rupees created in July for barrier-free trade between the two countries. At the same time, the organization is in constant dialogue with the governments of both countries and Russian companies in order to increase the supply of precious stones. India is considered one of the world's largest diamond processing and cutting centers, and Russia accounts for a third of all global diamond supplies. Due to Western sanctions, financial settlements between the two countries became more complicated, and chaos ensued in the market, as cutters and traders were looking for ways to continue buying Russian diamonds even if banks refused to finance operations. But in general, the situation with supplies has not improved, payments are not going to Russia, the Shah said.
At the same time, despite a certain shortage of diamond supply, there is also a reduced demand for diamonds (processed diamonds) in the world from the side of key importers – China and the USA. Against this background, the export of diamonds from India in the period from April to December fell by 7.7 percent in annual terms to $ 16.6 billion. According to Shah, so far the supply restriction in the market remains insignificant, but the real problems will begin when demand growth resumes.
An unexpected beneficiary of problems with the export of Russian diamonds was Botswana, which ranks second in the world after Russia in terms of production of this mineral. Thus, the surplus of the state budget of Botswana in April-September amounted to 598.7 million pools (46.9 million dollars), which was largely made possible due to an increase in export revenues from the sale of minerals by 66 percent, primarily diamonds.
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