The Indian diamond industry, whose turnover is estimated at $ 28 billion, was again on the verge of crisis, as banks dramatically reduced lending to the industry, the Times of India writes. At the same time, prices for rough diamonds are growing very fast, and prices for diamonds show only a slight increase.
The two largest lenders, Antwerp Diamond Bank (ADB) and ABN Amro, have already reduced their lending to 70% of the volume of diamond purchases, demanding that their customers pay the remaining share of their own funds.
This decision of banks is due to the frequent cases of non-return of debts from diamond companies in recent years. Only in the last year, two Indian-based companies based in Antwerp did not pay debts worth 8 billion rupees.
Annually diamantaires in India, Antwerp and Dubai receive borrowed funds in the amount of $ 15 billion to purchase raw materials. However, the situation of diamantaires, cutters, polishers and producers is complicated by the fact that extractive companies demand ever larger amounts for their raw materials.
"De Beers has recently raised prices for rough diamonds by 3-5%, which puts even greater pressure on diamantaires and the whole market," said one diamantair.
According to experts, over the past year and a half, prices for raw diamonds have increased by 10-15%, and in the secondary market, raw materials have risen in price by 20-25%. "We have some concerns about the development of this industry," said Bruno Nelemans, Executive Vice President, Strategy and Communications at Antwerp Diamond Bank. "The bank is dissatisfied with the correlation between the rise in prices for diamonds and diamonds."