Diamond industry expert Pranay Narvekar explains how retail changes trigger massive supply chain effects. Learn why tracking consumer trends beats watching wholesale markets.
The diamond industry needs to focus on retail trends. This simple shift could predict market changes better than watching wholesale numbers.
"The industry is fairly predictable," Narvekar explains. "If you know what's happening on the retail side, you can have a fair bit of an idea about what's happening on the polished and the rough side."
Most companies make a mistake. They watch polished and rough markets instead of consumer behavior.
Large companies track consumer trends. Smaller midstream companies miss this opportunity.
The Bullwhip Effect Hits Diamonds Hard
Small retail changes create massive supply chain disruptions. This is the bullwhip effect.
The diamond pipeline makes this effect worse. Retailers hold a year's worth of stock or more. Small demand shifts create huge upstream changes.
"Given that the diamond pipeline is such a large pipeline, you see that the effects are much more pronounced," Narvekar notes.
US Import Duties Impact Global Demand
When Narvekar spoke in July, US import duties on Indian goods were 10%. He predicted a 5% drop in global demand.
Why such a big impact? America represents half of all diamond demand.
President Trump has since raised duties to 50%. The impact will be even larger.
Small Diamond Market Shows Weakness
Two factors drive small diamond weakness:
- Chinese luxury demand for high-quality melee dropped
- US retailers shifted to lab-grown diamonds for fashion jewelry
Large Diamonds See Strong Demand
Retailers stock larger diamonds to meet consumer demand. This supports the entire market up to rough stones.
Synthetic Prices Drive Natural Diamond Comeback
Lab-grown diamond prices keep falling. Some bridal retailers now switch back to natural diamonds.
The price gap creates new opportunities for natural stones.
Supply Chain Reality Check
Mining companies hold inventory. This affects current supply dynamics.
Secondary factors in manufacturing and trading influence markets. But retail demand drives the core trends.
Key Takeaway for Diamond Professionals
Track what happens at jewelry stores. Consumer behavior predicts your market better than wholesale trading data.
The bullwhip effect means small retail changes create big opportunities and risks upstream.
Watch retail trends. Predict market moves. Stay ahead of supply chain disruptions.
Your business depends on understanding where consumers spend their money. Not where traders move their inventory.
This article explores how retail sector changes create amplified effects throughout the diamond supply chain. Industry analyst Pranay Narvekar reveals why companies should track consumer behavior rather than wholesale markets. The piece covers the bullwhip effect in diamonds, US import duty impacts, small diamond market weakness, and the natural vs lab-grown diamond shift.
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