Definite Recovery in Rough Diamonds, Led by Indian Industry  Mark A. Boston

He remains highly optimistic about the future of the Indian diamond industry. In a free and frank chat, he opines that India has been the engine of growth and creativity in the mass market. Some excerpts :

Diamond World : How was the response to the recent Las Vegas Show? How does it compare with earlier years?

Mark Boston : Given the grim recessionary background, there were a lot of projections and assumptions about the show-most of them pretty negative. There is no question that some people did much better than they expected and perhaps that is because they went there with a very positive attitude and that in itself can make a big difference, if you have a product to promote. Some people were so negative about the show that they almost had to do badly. This being said, no body is claiming that it was a great show, but there was a feeling that the worst was over, rather than yet to come.

Diamond World : Some observers believe that performance of the Las Vegas Show can be taken as an indicator of business prospects for the subsequent Christmas season. Is it so? Why?

Mark Boston : No. We do not hold the view that it determines the outcome of the Christmas season. However, there is no doubt that people are purchasing in preparation for the season, so the orders placed are an indication of their expectations.

Recovery Prospects :

Diamond World : Some recent reports indicate a recovery in the market for rough diamonds. If so, when did it start ? How are the prospects for the same in the rest of the year?

Mark Boston : Yes, indeed there is a definite recovery, although, the rough recovery is ahead of recovery in polished. As usual this recovery is led by the Indian Industry and I do not think anybody expected it to come from anywhere else (whatever the producers’ policies). This, of course, is a great, to not only producers and everybody upstream, but is very important to down stream confidence because India is always the engine of growth and creativity in the mass market and when the Indian Industry loses its innate optimism than the whole market suffers right through retail and consumer confidence too.

Diamond World : What was the volume of global production of rough diamonds in 2008? What are the expectations for 2009?

India Leads Recovery :

Mark Boston : Only leading producers can give definite reply. It, however, does seem clear that the Indian led recovery has prompted producers to resume production, knowing that the Indian Industry has regained its manufacturing momentum.

Diamond World : How do you visualize business prospects for the ensuing Christmas season ?

Desire for Diamonds Powerful :

Diamond World : The manufacturing industry in India may be operating now around 40-50 per cent of its capacity. How is the situation at other centres ?

Growing Confidence Encouraging Manufacturing :

Mark Boston : My Indian colleagues, who are very closer to the situation than I am, tell me that as confidence is growing, manufacturing activity is picking up and there is no question that in the last few weeks, the demand for rough has been very much factory-driven as manufacturers, large and small, have worried about the implications of both the mine closures and overall shortage of rough diamonds on their own business and prospects. So, the Indian manufacturing industry has a scale and critical mass that no other centre can compete with economically for the foreseeable future and it would be absurd for the producers to undermine the importance given that the Indian industry’s recovery is vital to their own interests.

Diamond World : How were imports of rough and exports of polished stones by China last year ? How are the prospects for the current year?

Mark Boston : I do not have reliable statistics in this regard, but clearly the robustness of the Chinese economy and market is a major and growing support to the Indian diamond industry which already enjoys the benefits of a huge and growing domestic market based on India’s abiding love affair with diamonds, one that is so embedded in Indian culture and artistic heritage.

Diamond World : When major global markets are sluggish, to which other markets can exporters divert their attention?

Widespread Clientele Need of the Hour :

Mark Boston : It is always wise for diamonds exporters to have a widespread of clients, large and small, across different markets and centres. In fact the success of the Indian industry has been very much based on the fact that Indian diamond companies from the beginning realized that global distribution was essential for their progress and performance and they showed unmatched ambition in achieving global networks. Clearly while the economic crisis which started in the US had a devastating effect on the world economy, there are countries that have great economic potential due to the size of their economies entrepreneurial skills and China and India are the ones that stand out the most. Russia with its resource based economy always seems to be more volatile but is not an economy to be under estimated anymore than Brazil and what about Latin America where there are some economies doing very well and others that never seem to fulfill their promise. But, as you grow older you realize that the perceptions about economies are so often wrong and for years people have written of the prospects for the USA in relation for example to Japan or Europe which would ignore the very real economic achievements of the EC given the political and ethnic divisions of Europe, a remarkable achievement in itself-which sometimes even Europeans do not appreciate. The biggest danger to the world economy is not globalization but de-globalization in the shape of protection and the diamond industry remains a global industry with a global mind set.