Customers of the Gemological Institute of America (GIA) are experiencing severe delays to grading submissions, creating worries about inventory management, Rapaport News has learned.
A sharp increase in rough buying since December has led to heightened demand for grading reports, while lower capacity because of Covid-19 restrictions has placed extra pressure on the GIA. The turnaround time in some markets is currently up to 25 days, compared with the usual period of around seven days, diamond manufacturers reported [the week of March 22].
“Demand for GIA diamond-grading services is at an all-time high,” said Tom Moses, the GIA’s executive vice president and chief laboratory and research officer, in an email interview with Rapaport News on [Wednesday March 24]. “That demand, and coronavirus impacts including government-mandated capacity restrictions, transportation constraints and absenteeism, have all led to longer-than-acceptable service times.”
Manufacturers in India — the world’s largest diamond-manufacturing hub — reported particularly serious backlogs at the Mumbai laboratory, one of the GIA’s busiest grading centers. [The week of March 15], the state of Maharashtra, in which Mumbai is located, ordered businesses to restrict in-person capacity to 50% in response to a rise in coronavirus infections.
According to the GIA’s website, a D- to Z-color diamond submitted to the Mumbai laboratory on March 25 would be ready on April 22. Some clients said they had been shipping goods to GIA locations in other countries in search of a faster turnaround.
De Beers and Alrosa sold almost $2 billion in rough in January and February, reflecting a recovery in demand as the retail market picked up during the holidays and manufacturers restocked. Moses said the GIA had managed to maintain usual service times up until the current demand surge, despite capacity restrictions in Mumbai, New York and other locations.
The fact that there are fewer flight options for moving goods between laboratories exacerbated the situation, he added. The GIA routinely sends diamonds from one location to another to manage capacity and ensure a random distribution around the world, the executive explained.
The delays are adding to the time it takes for companies to turn goods from the original rough into sellable polished, manufacturers pointed out.