Russian Diamond Manufacturers Oppose Gokhran Sales to India

IDMA LogoIn his letter, Shkadov argued that in accordance to Rusisan law, the Gokhran sells rough diamonds from its stock to Russian diamond manufacturers, as it aims to reduce the shortages in rough supplies to Russian diamond cutters. However, he emphasized that, as a rule, the amount of rough diamonds sold locally fails to meet demand, even that of ADMR’s own members. Having said that, he asked his Indian counterparts: “Do you really offer to formalize a mechanism for the sale of diamonds to India under these circumstances?”

Rough & Polished quoted Shkadov continuing his criticism of the Indian minister’s request: “Gentlemen, we understand your appetite, but at least have some conscience: Russia is not Zimbabwe and it works in a civilized market under civilized rules. It’s quite enough to have Indian companies lined up to buy from ALROSA, which declare a desire to drive out all other customers from this company offering to pay 10 percent to 15 percent more. Such moves lead to excessively inflated prices for rough diamonds making manufacturing economically inefficient since polished diamonds turn out to be cheaper than rough. And in this case the reason lies with speculation and not with processing costs, technology or marketing of finished goods as it is used to be within the practice of civilized market. Just remember what your similar actions brought about in 2008. I think, no one would like to have this situation repeated.”

“We are ready to discuss any options for cooperation in an open mode to prevent any such back door activities in the future and we ask you to consider the above in your future endeavors,” Rough & Polished quoted Shkadov’s concluding words.

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