SURAT: 2013 is going to be tough year for the small and medium diamantaires in the world’s biggest diamond cutting and polishing centre with the diamond mining companies in the world increasing the prices of rough diamonds by 3-5 per cent in January.

Following the 2.5 per cent to 3 per cent increase in the top quality of rough diamonds by the Diamond Trading Company (DTC) at its first sale to the sightholders last week, other diamond mining companies like Alrosa and BHP Billiton, too have increased the prices of rough diamonds by 3-4%.

Industry sources said the demand for rough diamonds is increasing. Rough traders are competing for goods, which has driven up prices of DTC goods over the past few days.

A reported shortage for better quality polished goods is strengthening prices, leading to robust demand for rough.

The DTC rough diamond goods are selling at more than 5-6% premium in the open market in Mumbai and Surat. However, the small and medium diamantaires have to pay higher prices to purchase the rough diamonds from the open market.

“After DTC other mining companies too have increased the prices of rough diamonds in the start of the year. This is going to further create problems for the small and medium diamantaires who have to depend on the goods purchased from the open market” said a diamantaire.

Dinesh Navadia, president, Surat Diamond Association (SDA) said, “The price rise is weighing heavy on the profit margins of the small and medium diamantaires. The prices of polished diamonds are stable and the increase in the rough diamond prices is going to affect the industry.”