Gemfields Delays Auction Over India Cash Crunch

Mumbai: Gemfields has pushed back a sale of higher-quality emeralds by two months to enable Indian buyers to adapt to the government’s decision to invalidate higher-value currency notes, according to Rapaport.

The auction of stones from the Kagem mine in Zambia will now take place in February, whereas it was previously scheduled to be held this month in Singapore.

India abolished its INR 500 and INR 1,000 rupee notes in November to curb black-market transactions. Market observers say the move has led to lower liquidity and will hit cash-focused jewelry sales and diamond trading.

“Most our customers for rough emeralds hail from India,” said Ian Harebottle, Gemfields’ chief executive officer. “The new demonetization program will require an adjustment period to allow industries and stakeholders to adapt to the new policies. For this reason, we have decided to delay our forthcoming emerald auction by approximately two months.”

Gemfields’ decision was well received by customers, Harebottle said.

Earlier Stornoway Diamond Corporation said that squeezed Indian liquidity led to its decision to withdraw smaller and lower-quality items from its first sale of rough diamonds from the new Renard mine in Canada. Demand was also dented midway through De Beers November sight.