G&J Trade Loses Momentum,Thanks to Coronavirus

China is a nucleus in the global economy. It is a manufacturing centre that contributes almost 16 per cent to the global gross domestic product. Hence, when the country is being overrun by a super-spreader like coronavirus, certain amount of collateral damage was expected. And Hong Kong, one of the main centres for gems and jewellery globally, is not too far away from Wuhan, the city where this dreadful virus first germinated. About 3350 manufacturing companies import and export precious jewellery in Hong Kong.
The outbreak has left the jewellery industry in a state of frenzy. In Hong Kong, more than 15 cases have been reported so far. The Hong Kong International Diamond, Gem & Pearl Show, one of the most important events for the gems and jewellery industry has been postponed. HKTDC stated that the show which was originally scheduled March 4 – 8 at the Hong Kong Convention Centre and the International Diamond, Gem & Pearl Show scheduled March 2 – 6 at AsiaWorld-Expo, will be postponed toMay 18 - 21 at the same venue.
Months of preparation ahead of the show has been put to test with the decision of postponing the show, as many stakeholders believe that the new timing of the show may not be fruitful after all. It does seem like Hong Kong has been jinxed, with issues cropping up one after the other, first the protests and now the deadly virus. The prodemocracy protests proved a headache to the entire gems and jewellery industry, especially India, which exports a third of its diamonds to Hong Kong. Ahead of Chinese New Year and Christmas, both very important events in HK, the protests presented a challenge, stunting the Chinese economy to a large extent. A report by Reuters suggested that the Hong Kong government has shut 10 border checkpoints with mainland China but stopped short of a complete closure. The city which is full of opportunities, always buzzing with activity is now fear stricken with a weak morale, because it is braving political, social and economic problems at the same time.

We all acknowledge the great importance of Hong Kong and Mainland China for the global diamond and jewellery trade. The long term effect of the coronavirus will be measured in time. However, for the time being, given the current situation there was no other option than rescheduling the Hong Kong trade show. Hopefully the situation will be resolved very soon and we can all go back to business as usual. Shai Schnitzer, S.Schnitzer DiamondsGlobal Impact

Retailers and manufacturers in Mainland China have closed down indefinitely and Hong Kong too declared a holiday till the first week of March. The mass shutdown to curb the spread of the virus has resulted in a massive supply chain distress. The concern for everybody in the industry is that the pandemic is yet to be contained, and its impact both domestically and internationally will be felt for a long time, as tourism will be hit hard. “We all acknowledge the great importance of Hong Kong and Mainland China for the global diamond and jewellery trade. The long term effect of the coronavirus will be measured in time. However, for the time being, given the current situation there was no other option than rescheduling the Hong Kong trade show. Hopefully the situation will be resolved very soon and we can all go back to business as usual,” said Shai Schnitzer of S.Schnitzer Diamonds.

It is unfortunate but expected. Our industry will be greatly affected as the busy season really begins after the Chinese New Year holidays. Now with the postponement of the show and with more countries imposing travel bans on people travelling to and from HK, sales will be affected without a doubt. And with Chinese authorities asking many factories to delay opening, production of HK companies who have factories in China, will be halted, but expenses will still continue Manoj P. Butani,China is an important economic centre for various trades and more than 17,000 people have been affected by the outbreak, causing trades across all sectors to come to a standstill. “It is unfortunate but expected. Our industry will be greatly affected as the busy season really begins after the Chinese New Year holidays. Now with the postponement of the show and with more countries imposing travel bans on people travelling to and from HK, sales will be affected without a doubt. And with Chinese authorities asking many factories to delay opening, production of HK companies who have factories in China, will be halted, but expenses will still continue,” said Manoj P. Butani of Butani Jewellery, Hong Kong.
The newly announced dates of the Hong Kong show also seems a little tricky and whether it will attract enough visitors or not is now in question as it falls right after Basel and just before JCK, add to that the fact that it falls after the Ramadan season. “We can only hope by then that the virus has been tackled but it remains to be seen whether customers will be will be willing to travel to HK so soon after,” adds Butani.
In its statement, HKTDC said, “the safety of exhibitors and buyers has always been a priority for the HKTDC. In line with the measures taken by the Hong Kong SAR Government against the spread of the novel coronavirus, and after consultation with representatives of the jewellery industry, the HKTDC will reschedule its HKTDC Hong Kong International Diamond, Gem & Pearl Show 2020 (originally scheduled for 2-6 March) and the HKTDC Hong Kong International Jewellery Show 2020 (originally scheduled for 4-8 March) to 18-21 May 2020.”

I think it is a disaster for the diamond industry. If this situation does not come under control, then the financial situation would be worst for the diamond industry. We have to gather and unite and solve the problem as soon as possible Rashmin Donda, Rainbow GemsThe virus first emerged in Wuhan, a city in central China, in late December and has killed more than 360 people in Mainland China. Over 20 countries have reported around 140 cases and all major airlines temporarily suspended their flight service to China. “I think it is a big disaster for the diamond industry. If this situation does not come under control, then the financial situation would be worst for the diamond industry. We have to gather and unite and solve the problem as soon as possible,” said Rashmin Donda of Rainbow Gems, Hong Kong.
“Not much to say. Hong Kong has been jinxed. Back to back negativity. We’re all just praying and hoping for everyone’s health and safety. Business will bounce back after all this turmoil, that’s for sure. Just need to pass and survive through such bad times,” said Harsh Maheshwari of Kunming Trading Company. Some even believe if the decision to postpone the show to May was in haste as the extent of the virus and whether or not it will be kept under control by March is still not clear. “We are currently negotiating with the exhibition organizers regarding cancellations and registration changes. As of today, there has been no harm to the diamond export growth forecast due to the effects of the coronavirus,” said Eran Zini, MD, Israel Diamond Exchange.
Luxury brands have been affected the most, with consumers keeping away from stores. The effect on the demand for luxury goods is not negligible. Many reports suggest that the sales have been hit harder than last year’s antigovernment protests. “Postponing the show seems to be deferring the decision of cancelling the show as the impact of the virus is not yet fully assessed. It will impact the business heavily in all industries across the board. As people will refrain from travelling and every one would be looking forward to assessing the actual impact of the same,” said Sanjay Phophaliya of Indus Jewellery. The virus is leaving a major strain on the global macroeconomic affairs and no one knows when the epidemic will be contained and when things would get back to normalcy.

There will be an impact for sure on the diamond industry; however, health is of foremost concern. People who have gone to villages for the holidays are not in a position to come back to Hong Kong and resume work. The Shanghai Diamond Exchange has announced that work will be resumed in February first week. So, we will have to wait and see Vipul Sutaria, Dharmanandan DiamondsFear looms in Surat
Almost 300 diamond and gems and jewellery companies participate in the HK show every year. Thousands of buyers who attend the show drive the business of these Indian companies. Surat, which is the cutting and polishing hub of India, is set to lose Rs 8,000 crore in the next couple of months, leading to a 20 per cent drop in exports because of the impact of the outbreak.
Every year, Rs 50,000 crore worth of polished diamonds are exported to Hong Kong amounting to 37 per cent of total polished diamond exports. As Hong Kong has declared a month long holiday, Indian diamond traders who have offices in Hong Kong are coming back to India.
“There will be an impact for sure on the diamond industry; however, health is of foremost concern. People who have gone to villages for the holidays are not in a position to come back to Hong Kong and resume work. The Shanghai Diamond Exchange has announced that work will be resumed in February first week. So, we will have to wait and see,” said Vipul Sutaria of Dharmanandan Diamonds.

It was an eventuality, the show either had to be postponed or cancelled. Around 30 per cent of our goods get exported to the Far East and now with the impact of the virus, we will definitely be losing some amount of business. Hong Kong has cordoned off its borders and even if someone wants to buy goods, they can’t Ankit Shah, Ankit GemsSeveral orders are placed ahead of the Hong Kong show and it is also a place where manufacturers get to know the pulse of the market and what the demand is like. “It was an eventuality, the show either had to be postponed or cancelled. Around 30 per cent of our goods get exported to the Far East and now with the impact of the virus, we will definitely be losing some amount of business. Hong Kong has cordoned off its borders and even if someone wants to buy goods, they can’t,” said Ankit Shah of Ankit Gems.

All of our major buyers are from the Far East. With the onset of the virus, we are going to lose out on business for sure. I foresee an 8-10 per cent dip in the exports in the first quarter and I don’t see the virus fading away anytime soon. The effect of the virus will be there till June. The show being postponed is also not a good thing. I don’t know how effective it will be as it is coinciding with Basel and JCK. We need to focus on other markets like Europe, U.S. and Middle East to make up for the lost business Vipul Shah, Asian Star The Indian trade was expecting a relief and a spike in exports after the U.S. China trade treaty. However, with the sudden outbreak of the virus, first quarter is not going to fair well. “All of our major buyers are from the Far East. With the onset of the virus, we are going to lose out on business for sure. I foresee an 8-10 per cent dip in the exports in the first quarter and I don’t see the virus fading away anytime soon. The effect of the virus will be there till June. The show being postponed is also not a good thing. I don’t know how effective it will be as it is coinciding with Basel and JCK. We need to focus on other markets like Europe, U.S. and Middle East to make up for the lost business,” said Vipul Shah of Asian Star

The other problem lies in the pricing of cut and polished diamonds. If the problem persists, the prices of polished diamonds will not increase resulting in the squeezing of the margins. No one knows when the virus will be contained, till such time, it is standstill mode for the industry.