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Israel
By Avi Krawitz
With Israeli diamantaires filling most of the seats on board, the EL AL flight from Tel Aviv to Hong Kong in mid-September had an air of anticipation about it. Discussions among the passengers suggested there was a lot riding on the coming days of business at the Hong Kong Jewellery & Gem Fair after enduring a long, slow summer. Concerns were eased to an extent by the second day of the show as traffic and trading levels turned out to be better than expected, even if business wasn’t booming. That helped lift the mood in the Israel Pavilion, which was located in the loose diamond section at the AsiaWorld-Expo venue of the show and featured 84 Ramat Gan–based companies. “We came with low expectations and the show was more upbeat than expected,” said Jeremy Medding, a partner at EMA Diamonds, which specializes in .10-carat to 3-carat stones in all colors and clarities. “It seems the market is stable and I don’t expect any major shakes in either direction during the holiday season.” People hadn’t bought in so long that the market improved even in the past few weeks leading up to the show, said Nissim Zuaretz, a partner at D.N Diamonds, which deals mainly in better-quality large diamonds and was recently named as an outstanding exporter by Israel’s Economy Ministry. “We’re seeing a good energy here. It’s positive,” he added. Still, while sales at the show were reasonable, trading did not reflect the steady visitor traffic passing through the diamond hall or buying as at previous September shows, reported Yoram Dvash, president of the Israel Diamond Exchange (IDE).
Exhibitors noted there were still challenges in the market, particularly in Asia Pacific, where demand has slowed in recent years. Hong Kong’s polished diamond imports from Israel fell 15 percent year on year to $987.9 million in the first half of 2016, according to the Diamond Federation of Hong Kong (DFHK). Despite the decline, Israel was still its second-largest supplier of diamonds during the period, as imports from other centers also dropped. You need inventory to service Asia Pacific because there’s less demand and more availability, while customers are very picky, Medding said. There are too many traders, he pointed out. The overcapacity issue facing the midstream hasn’t been addressed and there is not enough demand in Asia Pacific “to suck it all up,” he explained. Hong Kong still accounts for about 30 percent of Israel’s annual polished supply and therefore is very important to the Israel diamond industry’s marketing strategy, stressed Eli Avidar, IDE’s managing director. Israel hosts a pavilion at four shows in Hong Kong each year, with the September fair being the most important because it “sets the tone for the upcoming holiday season,” Avidar added.
Whether that will be the case this year remains to be seen. The show at least demonstrated that buyers are interested in goods again, “despite the challenges we are facing,” Dvash reported. “The stability in polished prices in recent months is contributing to a rise in confidence among retailers and jewelry manufacturers and I hope they will buy goods as we approach the holiday season.” Sentiment among Israeli dealers improved as they returned to the Ramat Gan bourse after the show and turned their attention to servicing their U.S. clients ahead of the holiday season. About 100 Israeli companies are projected to participate in the fifth edition of the Israel Diamond Week at the Diamond Dealers Club of New York from October 31 to November 2. “Based on past experience, the Israel Diamond Week in New York presents an exceptional opportunity for buyers to source diamonds right before the busy holiday season,” Dvash stressed.Article from the Rapaport Magazine - October 2016. To subscribe click here.
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