Coronavirus: Surat diamond industry stares at Rs 8,000 crore loss

The Surat diamond industry is likely to face a loss of around Rs 8,000 crore in next two months as Hong Kong, which is a major export destination, has declared a state of emergency due to the coronavirus outbreak in China, say experts.

Hong Kong is a major business hub for the Surat diamond industry, but schools and colleges have been closed there till the first week of March and even the businesses are seeing a dip in view of the outbreak of the novel coronavirus.

According to Gems and Jewellery Export Promotion Council (GJEPC) regional chairman Dinesh Navadiya, polished diamonds worth around Rs 50,000 crore are exported from Surat to Hong Kong every year.

“That’s around 37 per cent of the total exports from here. Now, due to coronavirus scare, Hong Kong has declared a month-long vacation. Gujarati traders having offices there are coming back to India,” he said.

If the situation does not improve, it will have a huge impact on the Surat diamond industry, which polishes 99 per cent of all rough diamonds imported in the country, he said.

“The Surat diamond industry is staring at a loss of around Rs 8,000 crore for February and March,” he added.

Another industry expert and diamond merchant Pravin Nanavati said there is a possibility of cancellation of an international jewellery exhibition in Hong Kong, to be held next month, due to the coronoavirus scare, which would hit the jewellery business in Surat.

“Polished diamonds and jewellery made in Surat reach across the world through Hong Kong only. Now, due to vacation there, our business is totally closed. Traders are also returning to India,” he said.

If the situation does not improve, the Surat diamond trade losses may run into “several thousand crores”, he said.
“We have been informed that the international exhibition in Hong Kong may be put off due to the coronavirus scare. We sell huge quantity of diamonds at the mega event,” Nanavati said.

Orders are also placed at the event and the entire year’s manufacturing targets are set, based on the response that Surat diamond traders get there, he said.

“If the event gets cancelled, we will lose huge business” he added.

Hong Kong has one of the world’s busiest airports and is a major transit point for China.

It is also struggling with the virus outbreak, with 18 people testing positive for the disease, including one who died.

On Tuesday, health officials in Hong Kong warned there was now growing evidence of local transmissions — cases where people have become infected without travelling to China.

The coronavirus is a large family of viruses that causes illnesses ranging from common cold to acute respiratory syndromes, but the virus that has killed people in China is a novel strain and not seen before.

Common symptoms of the novel coronavirus strain include respiratory symptoms such as fever, cough and shortness of breath, according to the WHO.

So far, the disease has killed more than 400 people in China and infected a further 20,000, nearly all of them in Hubei, a province in central part of the country.

[“source=indiatoday”]