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Israel
By Deena Taylor
Polished trading in the Israel Diamond Exchange (IDE) was relatively stable in March as diamantaires returned from the Hong Kong show. While sales at the show were not better than previous years, dealers reported that the event met their very low expectations. Approximately 150 Israeli companies exhibited at the show as part of the Israel Diamond Pavilion, which was organized by the Israel Diamond Institute Group of Companies (IDI), and another 30 Israeli companies took up exhibit space throughout the venue. Even though Hong Kong is Israel’s second-largest market and accounts for close to 30 percent of total polished diamond exports, the lack of trading at the show signaled to the Israelis that Far East demand is extremely cautious right now. One polished dealer, who requested anonymity, noted that Far East traders simply were not in a buying mood at the Hong Kong show and it was challenging to even close deals. “People came, looked at goods, asked for prices and moved on until they found what they wanted at a satisfactory price for them,” he explained. Other Israeli diamantaires agreed, noting that not only were buyers extremely selective but that the show itself was too close in time to the Chinese New Year. That schedule didn’t provide Chinese buyers enough time after the holiday to reassess their inventories before traveling to the show. On a bright note, Adi Gidron, who is responsible for European sales at Shlomo Bichachi Diamonds Ltd., a specialist in manufacturing baguette, taper and all other square cuts, reported that buyers in Hong Kong were eager to buy fancy shapes.
Ronen Yakubov, the executive director of the Yakubov Group, which has diamond manufacturing and jewelry operations, observed that it is the first time he recalls such widespread complaints at the show about diamond prices. “The market is very, very quiet. Right now, buyers are afraid to buy,” Yakubov said. “I don’t know what the reason is. If they do want to buy, they ask for really unsustainable, low prices. Then you have to sell at these prices. Unfortunately, this isn’t only a phenomenon in our company.” Given the subdued sales at the show, business across Ramat Gan was atypical for this time of the year and worryingly sluggish. A dealer who requested anonymity and trades certified diamonds from 1 carat to 10 carats and Gemological Institute of America (GIA) dossiers, expressed frustration at the market’s embrace of selective buying and bargain hunting. “Even if goods are worth more, the market is looking for goods that are under market price. It’s very rare to find someone who will pay the price and it’s very hard to get buyers to buy. We really have to wait for the market to get better and climb up because it is very slow right now,” the dealer said.
Some of the angst among the traders stems from the fact that diamond trading was quite healthy one year ago and for the whole first quarter of 2014. But since then, high rough prices have caused a slowdown. As one diamantaire stated, “If rough prices go down enough, people will start going into production and have cheaper stock on hand. This year, nobody can tell when the market will go up.” Yakubov added that what worries him is that nobody can pinpoint exactly what is disrupting the diamond trade at the moment. “Usually, this kind of turmoil is caused by the government, by prices or by the world market. This time, we don’t really know. It seems like it is none of these.” On the heels of the Hong Kong show, a number of Israelis prepared for the Basel shows. While some planned to sell, others sought to buy or at least to gain a sense of how the European markets are faring.
Approximately 20 members of the IDE visited Istanbul’s jewelry exhibition on March 12 to 15 as guests of the Jewelry Manufacturers Association of Turkey (IKO). The delegation was invited to Turkey in an effort to strengthen ties between the two countries. It followed the attendance of a large Turkish delegation at the International Diamond Week held at the bourse in Israel in February. The Israeli delegation was headed by Jakob Katan, vice president of IDE. The Turkish government recently lifted a 20 percent diamond tax on cash transactions made by members of the Turkish Diamond Exchange and exempted dealers in the Istanbul diamond and precious stone market from an 18 percent value-added tax. The lifting of the taxes in September 2014 was part of the country’s efforts to grow its diamond trading activity.Article from the Rapaport Magazine - April 2015. To subscribe click here.
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