International rating agency Crisil Ratings said that India's diamond exports could shrink by 20% to US$19 billion by the end of fiscal 2021. Credit: File photo.

Diamonds may be a girl’s best friend, but perhaps less so during a coronavirus outbreak.

The global jewelry industry has taken a big hit from Covid-19 as consumers stay away, with a Chinese diamond importer predicting imports from India, which is the world’s largest polishing center, will slump 30% in 2020, Global Times reported.

“Consumers are not in the mood to buy jewelry at a time when their safety is at risk,” said Zhao Chenxi, manager of Xinyue Yuchen Beijing Diamond Co.

Zhao’s jewelry store in Beijing’s CBD has been shut for nearly two months since the outbreak began, without sales or inventory additions.

“If there was no virus, I would have imported about 1 million yuan ($144,161) worth of diamonds from India. But I haven’t imported any since late January,” he told the Global Times, saying that total imports from India may drop 30% this year.

As the outbreak amplifies sluggishness in global demand, International rating agency Crisil Ratings said that India’s diamond exports could shrink by 20% to US$19 billion by the end of fiscal 2021, according to a report posted on its website.

The Hong Kong Special Administrative Regions accounts for about 40% of India’s diamond exports, but the city hasn’t received any diamond exports since January 15 this year, the report said. 

The postponement of two large jewelry shows that had been scheduled for March in Hong Kong further hammered the industry, the report said.

To contain the spread of the virus, Hong Kong Trade Development Council (HKTDC) in early February postponed the Hong Kong International Diamond, Gem & Pearl Show, scheduled for Monday, and the Hong Kong International Jewelry Show scheduled for Wednesday, to mid-May.

In 2019, the two events attracted a total of more than 4,600 exhibitors and over 90,000 buyers from 141 countries and regions, according to the HKTDC.

A spokesperson of Hong Kong-listed Chow Tai Fook Jewellery Group, the world’s second-largest jewelry retailer, told the Global Times that its inventories, which were built up for the Spring Festival shopping season, will remain at a higher level than usual in the short term, due to weakened consumer sentiment and sluggish demand.

Its production center in the epidemic’s epicenter Wuhan, Central China’s Hubei Province — mainly handling mass luxury gold products and contributing about 15-20% of the group’s jewelry production — is still under temporary suspension, the spokesperson said, adding that production has been reallocated to Shunde and Shenzhen in South China’s Guangdong Province.

As of February 29, about 70% and 64% of the group’s points of sale in the Chinese mainland and Hong Kong and Macao has resumed operations.