What we are seeing is a group of manufacturers buying enormous amounts of rough at very high and unprofitable prices, which will yield less than needed polished, using credit they may have difficulty paying off because the prices they’ll be able to achieve for the polished can only be low… What better definition for the circumstances that lead to a market to peril. Do you feel this is sustainable? Isn’t it our experience that when rough is purchased in (overall) large quantities with high premiums, the miners raise prices? Is demand for polished strong enough and prices high enough to make increased rough prices reasonable? I don’t think so.
- Ehud Arye Laniado on mid-size and small manufacturers in India being willing to pay a large premium for goods that the larger companies passed over, and the large supply of goods in a market with a few specific shortages and demands.