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Israel
By Avi Krawitz
Sentiment improved in the Israel Diamond Exchange (IDE) after the Hong Kong show met dealer expectations. Approximately 130 companies exhibited in the Israel Diamond Pavilion at the show, registering as one of the largest international pavilions at the event. Most Israeli dealers who attended noted strong traffic and steady Far East demand for goods, despite the higher prices in the market. “It is very encouraging to see that buyers have changed their attitude to the higher prices of polished goods,” said Mishael Vardi, the owner of VMK Diamonds, a supplier of fancy color diamonds. “While they were still very reluctant to accept that prices had gone up at the June and September shows in Hong Kong, this time we saw that attitude had disappeared.” As a result, polished suppliers returned from the show confident the trading momentum would continue in the bourse, particularly as they prepared for the U.S. and International Diamond Week taking place from April 6 to 10. More than 400 Israeli companies are participating in the event, with close to $2 billion worth of goods on display. The Diamond Week is part of IDE’s strategy to revitalize activity on the bourse trading floor, following the success of the 2013 Diamond Week event and the previous Israel Diamond Weeks that were held in the New York Diamond Dealers Club (DDC).
As part of a similar initiative to raise Israel’s profile in the rough diamond market, the exchange hosted the inaugural International Rough Diamond Week in March. The event consisted of rough auctions by ALROSA, De Beers, Rio Tinto, I. Hennig and Tzoffey’s 1818, with each company reporting that they were fully booked during the week. Company representatives noted that Israel is currently an important target market for rough goods. Auction results were not available at press time, with some of the companies having additional viewing of the auction goods in other centers around the world. Shmuel Schnitzer, IDE’s president, told Rapaport Magazine that manufacturers are “hungry” for rough from primary sources and they want to buy in Israel. He stressed that the Rough Diamond Week was part of an effort to bring more rough to the Israel market as a catalyst to increase manufacturing activity in the country. Schnitzer reported that IDE, together with the Israel Diamond Institute Group of Companies (IDI) and the Israel Diamond Manufacturers Association (IsDMA), was overseeing the launch of a pilot factory to serve local manufacturers in Ramat Gan. The factory is expected to begin production within the next two months on a budget of more than $1 million and will employ approximately 100 people in its initial stages. “There’s no reason we shouldn’t manufacture more goods in Israel, especially the better-quality triple EX diamonds where the labor cost is negligible,” Schnitzer said. While the goods presented at the Rough Diamond Week were primarily run-of-mine production, there were some notably large and exceptional single stones up for sale, as well as high-value fancy colored rough stones.
Organizers of the upcoming U.S. and International Diamond Week event for polished diamonds in April noted that Israel has developed a knowledgeable base of dealers in fancy color diamonds and that there will be an abundance of fancy color goods on offer at the April Diamond Week, despite the rarity of these goods. “Only one out of every 10,000 gem-quality diamonds mined is a fancy color diamond,” said Leibish Polnauer, president of Leibish & Co., a supplier of fancy color diamonds. “Still, polished fancy color goods are readily available on the market in Israel.” Dealers returning from Hong Kong noted continued strong demand for fancy color diamonds at the show, as well as for Gemological Institute of America (GIA) dossier goods, which have dominated the market in the first quarter of 2014. As the volume of trading has increased, the mood in the bourse has been positive in advance of the April Diamond Week. “This year, the market is looking very promising because the Far East and the U.S. markets are both positive,” Schnitzer said. “There is volume and good demand, but the main challenge for manufacturers remains profitability. I hope the rough producers will be patient in raising prices to help manufacturers’ profitability.”
Polished dealers also hope their profit margins will improve after the Finance Committee of Israel’s parliament, known as the Knesset, approved lowering the import duty on polished diamonds from .135 percent to .1 percent. Shmuel Mordechai, Israel’s diamond controller, confirmed that members of the committee met with the industry’s leadership in late February to discuss lowering the duty in an effort to assist the local diamond market. Mordechai told Rapaport Magazine that he hopes the lower duty will become effective before the end of March, although no update was provided as of press time.Article from the Rapaport Magazine - April 2014. To subscribe click here.
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