Virus Curbs Set to Deepen Slump in India’s Diamond Exports
(Bloomberg) -- Diamond and jewelry exporters in India can’t catch a break.
After a pick up in December, the first quarter is looking increasingly bleak as the coronavirus outbreak that’s disrupting travel across the world hurts demand in Hong Kong, India’s biggest export market. The blow comes after months of protests in the city and the protracted trade war between the U.S. and China already sapped demand.
“Exports to Hong Kong during this quarter would be significantly down,” Colin Shah, vice chairman of the Gem & Jewellery Export Promotion Council, in an interview. “December was better so we all felt that it would recover, but from January onward the coronavirus issue has surfaced. So January exports have been hit and it may take at least a month or two to recover, as we have seen in the past during the SARS virus when it took a quarter to recover.”
The coronavirus outbreak has triggered an unprecedented clampdown on travel to and from the world’s second-biggest economy, with the U.S. to India and Hong Kong introducing some form of China-related restrictions. Gold jewelry sales in China may drop 6% this year as buyers stayed at home during Lunar New Year, typically the peak season, according to Metals Focus.
India’s cut and polished diamond exports to Hong Kong have slumped 23% in the nine months to December from a year earlier to $5.4 billion, according to data from the council. The country’s total exports of gems and jewelry to Hong Kong are down 9% to $7.4 billion in the period, the data shows.
Indian polishers are the link between African mines and jewelry stores in New York, London and Hong Kong. A lot of the stones are exported to the U.S. via Hong Kong and China, where they are used for jewelry manufacturing or wholesale trading.
Amid efforts to stem the spread of the virus, the Hong Kong Trade Development Council postponed two industry events to May from March. The rescheduling is in line with government measures and came after consultation with the jewelry industry, it said.
“Right now nobody is going to Hong Kong,” Shah said. “No one knows how long the impact of the coronavirus will last.”
©2020 Bloomberg L.P.