De Beers India sees rising Covid cases hitting Akshaya Tritiya sales, pins hopes on vaccination

Diamond major De Beers India sees the surge in Covid-19 infections in the country affecting sales ahead of the festival of Akshaya Tritiya, and its top executive said accelerating the pace of vaccination could help lessen the impact.

Akshaya Tritiya is considered auspicious for buying of gold and diamond jewellery. It will be celebrated on May 14 this year.

In India, De Beers sells diamonds under the brand name ‘Forevermark’. In the January-March quarter of 2021, the company had recorded a 30% increase in sales over the same quarter of the previous year, largely due to pent up demand. Covid cases in the country had dropped and people were less fearful of stepping out for shopping.

“However, the scenario has now changed as the cases have surged. The next few weeks are very critical. If the pace of vaccination does not pick up and stricter Covid protocols are not maintained, then sales will get impacted on Akshaya Tritiya,” Sachin Jain, managing director, De Beers India, told ET.

Jain also voiced concern over the situation in Surat, the diamond cutting and polishing hub of India. “I have heard that the processors in Surat are taking efforts to vaccinate the workers. The faster the workers are vaccinated, the lesser will be the impact on diamond trade,” he said.

It is said that 14 out of 15 diamonds in the world are cut and polished in Surat.

The Surat Municipal Corporation, in a bid to curb the rise in Covid-19 infections, has issued a notification banning workers above 45 years of age and who have not taken their vaccine shot from entering textile markets, diamond units, Hira Bazaar, commercial shopping centres, malls and industrial units.

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“The trade had suffered last year too on Akshaya Tritiya because of the pandemic. We were thinking that this year Akshaya Tritiya will be a good one as people who had not been able to buy gold and diamonds will loosen their purse strings. But the surge in Covid cases is a concern,” Jain said, adding that Akshaya Tritiya sales pick up much ahead of the festival day.

According to Jain, De Beers India saw good demand for diamonds this calendar year till the middle of March. “The sentiment was very positive. As the economy reopened, we were seeing a good recovery. Millennials were the most important class of buyers of diamonds,” he said.

According to Jain diamond prices have not seen a sharp rise. “Polished diamond prices have remained stable. In fact, during Diwali and Dhanteras, we had seen that demand is coming from tier 2 and 3 cities. For a change, from January onwards, we were seeing demand from metros, which was a very healthy sign,” he said.

The De Beers India chief said that classic designs in the Rs 50,000 to Rs 1 lakh price range attracts most buyers.

The situation in the diamond market has not yet improved. According to the annual report on the global diamond industry, prepared by the Antwerp World Diamond Centre (AWDC) and Bain & Company, the current crisis could be more severe than 2009, and a double-dip recession is possible. Full recovery and a return to a historic growth trajectory aren’t expected until 2022 to 2024.

According to the report, three factors will impact the pace and shape of the recovery–epidemiology, government policy response, and consumer response.

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