Russia to continue buying diamonds through state fund in 2025
The Russian budget for 2025-2027 has set aside $1.55 billion for the purchase of precious metals and gems.
Russian diamond producer Alrosa has suspended rough diamond supply for September and October after a request from India’s leading trade body, the Gems and Jewellery Export Promotion Council (GJEPC) said on Wednesday.
The move aims to avert a supply glut in the global market and aid diamond prices amid weak demand, GJEPC chair Vipul Shah told Reuters. The trade body had reached out to several global mining companies earlier this month to raise concerns on issues impacting diamond trade, he added.
Shah also said the GJEPC had communicated with top diamond producer De Beers, a unit of Anglo American, which had pledged to “provide complete flexibility to all their clients.”
De Beers said separately it “will continue to take a responsible approach to rough diamond sales, supplying to demand, and will focus on additional supply flexibility.”
Flexibility includes purchase deferrals and buybacks.
Sanctions-hit Alrosa said the suspension would “strengthen the stability of the supply chain of rough and polished diamonds already by the beginning of next year.”
The news comes as the Group of Seven (G7) countries is expected to announce an import ban on Russian diamonds in the next two or three weeks to tighten a squeeze on Russia’s capacity to finance the war in Ukraine.
The plan could transform the global diamond supply chain, but implementation will depend heavily on India, whose diamond industry employs millions of people who cut and polish 90% of the world’s diamonds.
India’s gems and jewellery exports fell nearly 4.4% by value between April to August this year to $12.4 billion from last year, according to government data released last week.
Exports fell on relatively muted demand for polished diamonds from major consumers the United States and China, Shah said.
It’s too early to say whether the two-month halt will help prevent overstocking adequately, he added, amid the shutdown of manufacturing centres in India during the Diwali festival in November.
(By Shivangi Acharya, Clara Denina and Polina Devitt; Editing by Bernadette Baum and Mark Potter)
Comments