The diamond trade and industry are now eagerly waiting for some good news from some quarter, after facing a disappointing Christmas season for diamond and jewellery business. Though estimates in this regard may vary, it is widely believed that diamond and jewellery sales during the outgoing festival season were lower by about 40 per cent compared with those of the preceding year in the US which remains the biggest market for precious goods and accounts for nearly 50 per cent share in this global business.%% {{Retailers Nursing Unsold Stocks :}}$$ This has left many overseas retailers with substantial unsold stocks at the end of 2008, though many of them offered discounts ranging from 50 to 60 per cent, if not more, in order to push up sales. This is believed to have badly affected margins of several such retailers. By mid-January five U.S. retailers had already approached bankruptcy courts.%% {{Diamonds Faltered Later in 2008 :}}$$ For diamond business the year 2008, no doubt, started on a buoyant note. Manufacturers seemed eager to pick up rough from the open market even on substantial premiums, mostly going by the reports about increasing mismatch between the demand and supply. Prices of both rough and polished stones continued to move northward. Investors who seemed to be waiting in the wings, jumped into the market, pushing up the prices of particularly large sized diamonds to dizzy highs.%% {{Change in Market Scenario :}}$$ In the latter half of 2008, particularly after the bankruptcy of Lehman Brothers, the sentiment was badly affected not only for stocks and financial markets, but also for metals and other commodities. Diamond and jewellery could not remain unaffected, as the economic meltdown in the US continued and unemployment kept rising.%% {{Consumer Confidence Recedes :}}$$ The consumer confidence was badly hit in the US. According to the Conference Board, consumer confidence stood at 87.3 in the US at the commencement of 2008. By the end of the year it had collapsed to 38. Evidently the US buyers were in no mood to buy luxuries.%% {{Many Factories Remain Closed :}}$$ Everyone now seems to be waiting to see how 2009 shapes up. Most manufacturers in India are left with substantial unsold stocks. This explains why most of them have been delaying the reopening of their factories, though the usual 20-day Diwali vacations had completed nearly 3 months by mid-January 2009.%%

{{Money Stringency Continues :}}$$ In view of accumulation of stocks, and inordinate delays in receiving payments from abroad the diamond industry and trade are facing considerable money stringency. This can be seen from the fact that interest rates on borrowings from non-banking sources are said to be ranging from 24 to 36 per cent per annum.%% {{Polished Outflow Declined :}}$$ Meanwhile, shipments of cut and polished diamonds from India in December 2008, according to preliminary statistics, fell to US$ 663.21 million (Rs. 3,276.23 crore) from US$ 899.69 million (Rs. 3,560.28 crore) in the same month a year ago, revealing a decline of 26.28 per cent in dollar-terms and 7.46 per cent in rupee terms.%% For the first nine months (April to December) of 2008-09 shipments of cut and polished diamonds from the country have totalled US$ 10,283.14 million (Rs. 45,153.26 crore), against US$ 10,047.18 million (Rs. 40,746.19 crore), showing a nominal increase of 2.35 per cent in dollar terms and 10.91 per cent in rupee terms.%% {{Downturn in Rough Imports :}}$$ Imports of rough diamonds for the April-December period of 2008-09 totalling US$ 6,904.40 million (Rs. 30,769.08 crore) against US$ 7,262.04 million (Rs. 29,803.41 crore) in the same period of the earlier year revealing a decline of 4.92 per cent in dollar-terms and a slight increase of 3.2 per cent in rupee terms in view of the lower exchange value of the Indian currency. Imports of cut and polished diamonds during the period rose smartly to US$ 5,367.97 million (Rs. 23,914.29 crore) from US$ 3,647.62 million (Rs. 14,969.84 crore) in the same period of the earlier year.%% {{Gold Jewellery Exports in Doldrums :}}$$ Exports of gold jewellery during the April-December 2008 period of 2008-’09, compared with the same period of the earlier year, have been down by 8.71 per cent in dollar-terms and by 1.07 per cent in rupee-terms, as they totalled only US$ 3,834.21 million (Rs. 16,836.01 crore) against US$ 4,199.89 million (Rs. 17,017.95 crore) in the identical period of the earlier year.%% {{Bullion Under Cross-pressures :}}$$ The main influences on the market for bullion are now global economic meltdown and the strengthening dollar. While economic recession trends to push up gold prices, stronger dollar seems to be pushing it back in the opposite direction. In the overseas market gold was quoted on January 16, 2009 at US$ 824.06 per oz. and silver at US$ 10.78 per oz. in the inland market; standard gold was quoted on the same day at Rs. 13,000 per 10 grammes and silver at Rs. 17,800 per kg. While stocks and various commodities declined to a varying extent in 2008, gold registered some improvement over the year, thus reinforcing investor’s confidence in the yellow metal.%%