Diamond Price increase on the near horizon

[Texas Leaguer]

Due to the latest tariff threat diamond prices appear on the verge of a significant increase. As of this moment the US is set to impose on India an increase from 10-25% on Aug 1. Since the majority of the world's diamonds are cut in India this could mean a 15% increase to take effect as early as this weekend. We have been advised by multiple trading partners that Indian manufacturers are poised to implement the increases, both on new orders and on diamonds that are in the US but have not been invoiced.

We could see an accross the board price increase reflected in virtual inventory that predominates the online space. And this could happen almost overnight, which will be an unprecedented event in the diamond industry.

With all the vasilation and pauses and backtracking that we have witnessed to date with this trade war, nobody can say what will actually happen. But India is gearing up for it. Uncertainty has plagued the diamond industry for months now, causing cancelled orders with manufacturers and various other forms of disruption. What will actually happen next is likewise uncertain, but it is something that members of this forum should be aware of so nobody it taken completely by surprise.

https://apnews.com/article/trump-tariffs-russia-india-9e388a55583e7007149819c52f0fd71b

 

[MissGotRocks]

@Texas Leaguer, will these price increases also affect decisions regarding bringing in more inventory?

 

[Texas Leaguer]

@Texas Leaguer, will these price increases also affect decisions regarding bringing in more inventory?

The effects are many. As you mention, it changes the calculus for those of us buying and stocking diamonds. First, you are paying more so you cannot buy as much inventory. But secondly, since your cost is greater and you have to sell for higher prices, there is the question of how that will impact sales.

In addition to the "known unknowns", there will be the "unknown unknowns" as Donald Rumsfeld famously said. We seem to be in the process of discovering them.

It may also affect the dynamics of the sales of virtual inventory. What happens when an online sale that is shipped from India gets returned by the consumer. Will it even be economically feasible to return the stone to India? How will the supply chain adapt to issues like this? How will policies have to change? And these are just the "known unknowns"!

 

[MissGotRocks]

The effects are many. As you mention, it changes the calculus for those of us buying and stocking diamonds. First, you are paying more so you cannot buy as much inventory. But secondly, since your cost is greater and you have to sell for higher prices, there is the question of how that will impact sales.

In addition to the "known unknowns", there will be the "unknown unknowns" as Donald Rumsfeld famously said. We seem to be in the process of discovering them.

It may also affect the dynamics of the sales of virtual inventory. What happens when an online sale that is shipped from India gets returned by the consumer. Will it even be economically feasible to return the stone to India? How will the supply chain adapt to issues like this? How will policies have to change? And these are just the "known unknowns"!

I figured some it would be true, but of course could not foresee some of the other questions you mentioned. Yet another blow to the diamond/jewelry world. I appreciate the heads up and the difficulty in navigating these churning waters.

 

[Texas Leaguer]

Yes, we are looking for that mysterious "bridge over troubled waters". If anyone spots it, please let me know!

 

[Texas Leaguer]

One obvious takeaway at this moment is this: If you are providing advice to visitors to the site who are close to making a decision, it might be a good idea to advise them that pulling the trigger soon might save them some $$.

 

[MissGotRocks]

One obvious takeaway at this moment is this: If you are providing advice to visitors to the site who are close to making a decision, it might be a good idea to advise them that pulling the trigger soon might save them some $$.

Point well taken!!

 

[molinePDG]

This reads as an equally unfortunate scenario as what has been/about to go on with pearls. Wishing everybody all the best on the diamond side of the aisle, as it were, with all of the uncertainty.

As Bryan points out, there's only so much one can do to guard against some headwinds, and there's also the sales aspect of course.

Fingers crossed for as smooth sailing as could be hoped ahead...

 

[Garry H (Cut Nut)]

Virtual diamonds, most of which sit in India, will go up automatically.

 

[tyty333]

Virtual diamonds, most of which sit in India, will go up automatically.

What about lab diamonds? Are they mostly cut in India, and will they also be going up in price?

 

[Rockdiamond]

What about lab diamonds? Are they mostly cut in India, and will they also be going up in price?

Absolutely. Now we are faced with an unwelcome forced decision. Buy today at the “old” price or face 25% increase tomorrow.
Except maybe the wind blows the other way next week and the taxes, I mean Tariffs get lifted….. or raised.
I guess it’s like the old Chinese proverb… We are living in “interesting times”

 

[freddyboston]

What about lab diamonds? Are they mostly cut in India, and will they also be going up in price?

one nice thing about synthetics is the low price (cost basis for the tariff)
is it wholesale price they use ??

if anything it might put a floor in that market - have a $$ Veblen effect