All roads, for global and domestic diamond traders seem to be leading to these western markets. Says RV Karoor, head Diamond Bank, ABN Amro: "Backed by the overall prosperity in the western markets, the diamond market is set to recover once again". ABN Amro is considered to be the diamond traders' bank for the past few decades. Consider the following developments:

International: After cutting down supplies by around 40 per cent by July 1997, De Beers, the Anglo-Dutch diamond giant is reported to have decided to ease curbs on supplies of roughs in the second half of 1998. De Beers lifted June sales byabout one-third from May levels to $390 million, of which nearly all the extra diamonds were Indian goods.

In the first week of this month (June 1998), Russia finally kicked off the much-awaited Russian Diamond Chamber, a non-profit organisation similar to diamond exchange, by the Russian diamond mining company Almazy Roffii Sakha (ARS). The Chamber, was initially slated to be operational by March 1998. The Chamber plans to have associated organisations at St Petersburg, Yaukutsk, and other centres throughout Russia.

In a price war with Australia's Argyle since mid-1996, De Beers had slashed prices drastically. Even Argyle had responded with cut in its supplies. Now, De Beers' step of increasing rough supplies is likely to be offered at higher prices. Israel Diamond Exchange President Itzhak Forem is reported to have said: "This will happen much faster than most people in jewellery industry expect"

Following soft holiday sales, two TV shopping networks -- QVC and Home Shopping Network, St Petersburg --are gearing up for 1998 with aggressive merchandising and marketing strategies that include plans to expand their on-line jewellery businesses. At QVC, 1997 jewellery sales reached $725 million markMore than 70 new diamond jewellery shops and trading offices have recently been opened in 47th Avenue, Manhattan, the hot diamond trading and marketing centre in the USA. Most of these are said to have come from the troubled south east Asian markets.

Domestic: In the domestic market, DTC (Diamond Trading Company) boxes of rough diamonds have begun commanding premium of around 1-4 per cent against discounts of around 4-6 per cent till March-April this year. The earlier nine months' of excess stock is said to have been exhausted, prompting traders, jewellery makers to ask for more better quality goods.

De Beers last month kicked off the Rs 14-crore diamond jewellery marketing exercise on Star TV and has been aggressively advertising during peak time. This is sure to yield good returns for De Beers, tradersfeel.

With Russia kicking off its Diamond Chamber, the Indian government has once again initiated its six-month old efforts with Gem and Jewellery Export Promotion Council for a high-level delegation there and take advantage of the emerging situation in the hope of getting diamonds cheaper than De Beer's DTC, one of the main suppliers of roughs in the Indian market. The proposed Indian delegation is likely to go to Russia by end-June this yearAt least 10 top Indian diamond traders are said to have opened offices/ factories in China, the new market considered to have "sizeable chunk of disposable income" after almost a decade of successful liberalisation.

"De Beers is closely watching the overall developments in the markets," said a top source at a leading diamond company. "The cost of holding roughs over the past more than one year has been rising for De Beers and therefore the decision of increasing the supplies of roughs".

A section of global diamond traders feel the cost of emerging resurgence indemand for diamonds may result in higher prices for roughs and therefore, the cut and polished diamonds as also for the diamond jewellery. For Indian diamond traders, with the sliding rupee versus dollar, the overall rough import prices are likely to be higher than in the past.

Opening up of the Russian Diamond Chamber could not have come at more opportune time, observers say. Despite its contract to sell its diamonds only to De Beers, Russian diamonds are being sold openly in the market. This (the selling) is more prominent in the Chinese market.

"The Russian diamond exchange is likely to give De Beers considerable competition, and help check undue rise in roughs to be supplied by De Beers," said the industry source.

However, the extent to which the new equation between Russia and De Beers will affect diamond prices is yet to be seen, primarily because, Russia has already committed to sell around $350 million to China outside De Beers' marketing arrangement. Moreover, hardly 35-40 per cent of theRussian goods are suitable to the Indian market, the balance are for Israel and Belgium markets.

The availability of Russian goods to the Indian market therefore, depends on the extent to which China will be able to absorb the offered goods. The Central Selling Organisation (CSO) of De Beers is to announce its sales figures later this month. Last week, The Diamond Trading Company (DTC) had its board meeting in Mumbai, informed sources say. But details were not available despite repeated attempts to contact DTC director and India representative Rajiv Bhandari.

Argyle, De Beer's arc rival, after separation in 1996, too cut down its supplies to the market. Argyle gets 90 per cent of its roughs processed in India and therefore, had recently invited some of its top Indian clients in Australia to strengthen relationships.