(IDEX Online) - The COVID-19 pandemic could see sales of rough diamonds globally fall by as much as 40 per cent.
Lockdown measures have badly hit all stages of the diamond value chain from rough diamond miners, through cutters and polishers to the jewelry end market, according to Moody's, the international rating agency.
"We forecast a 30 to 40 per cent fall in global revenue from rough diamond sales this year, a credit negative for major producers Alrosa and De Beers," it said.
It forecasts a recovery starting in the second half of 2020, as restrictions are eased. Global revenue from rough diamond will grow by 20 to 25 per cent in 2021, reaching $10bn, it predicts.
Total production of rough diamonds will contract by about the same proportion, down to from 140 to 145 m carats in 2019 to between 100 and 110m carats in 2020.
Sales of polished diamonds from India, which dominates the market, could decline by as much as 30 per cent to $13bn in the financial year ending March 2021.
"We estimate that since the recovery of rough diamond sales is likely to be gradual from June to July, global production in 2020 will still outweigh sales of about 90 to 95m carats by about 10 to 20m carats, which would result in an accumulation of diamonds, hurting producers' operating cash flows," said the report.