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New Diamond Panel Tackles Undisclosed Synthetics

Jul 30, 2017 5:17 AM   By Avi Krawitz
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RAPAPORT... A number of organizations have formed a committee to protect natural diamonds against the threat of synthetic ones, Praveenshankar Pandya, chairman of India’s Gem and Jewellery Export Promotion Council (GJEPC), said Friday.

“Our goal is to create a separate footprint for natural and synthetic diamonds,” Pandya (pictured) explained at a press briefing during the India International Jewellery Show (IIJS) in Mumbai. “We will leverage all possible measures to ensure detection and segregation of natural and synthetic diamonds at every stage of the value chain, from rough to finished jewelry.”

The Diamond Monitoring Committee will primarily work to eradicate illicit mixing of synthetics with natural diamonds, expanding initiatives implemented in the main trading centers across the globe, Pandya said.

Such efforts include making detection machines available at every level of the diamond pipeline, at affordable rates, he explained.

Other issues on the committee’s agenda include introducing standardized language on how to refer to synthetics — also known as lab-grown diamonds — as well as separate codes to classify them for imports and exports.

The committee includes representatives from the GJEPC, the Diamond Producers Association (DPA), Signet Jewelers, and associations from Belgium, Israel, the US, Hong Kong and China, among others, Pandya reported.

The group met for the first time during IIJS and will convene again at the Hong Kong Jewellery and Gem Fair in September.

The committee, Pandya stressed, is not against the synthetic diamond industry, but against fraudulent activity often associated with it — namely, failing to disclose synthetics, and mixing them with natural diamonds. He also objected to synthetics sellers adopting negative marketing against the natural diamond product.

“We won’t allow synthetics to piggyback on the natural diamond trade’s success,” Pandya said. “It has to go through the pains of growing its own market. If it does that, I will support it, but it doesn’t have to do so at the expense of natural diamonds.”

Image: GJEPC
Tags: Avi Krawitz, Diamond Monitoring Committee, Diamond Producers Association, Dpa, Gem and Jewellery Export Promotion Council, GJEPC, Hong Kong Jewellery and Gem Fair, IIJS, India International Jewelry Show, mumbai, Praveenshankar Pandya, Signet Jewelers, Synthetic diamonds
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Aug 6, 2017 9:46AM    By Avi Krawitz
Dear Patrick

Thank you for your comment below.

The article “Synthetic Diamond Scam,” which you reference, written by our chairman Martin Rapaport and published in the April 2016 issue of Rapaport Magazine, outlines our concerns about the synthetic — or lab-grown — diamond market. In fact, many of the points you raise are addressed in the article itself.

Before we get to those, a word on terminology: The industry is in discussions regarding how to consistently refer to lab-grown diamonds — as the article on above explains. For now, we’re comfortable with the use of both synthetics and lab-grown when referring to this product.

Mr. Rapaport’s article does not question the synthetics product itself, but focuses on the manner in which synthetics are marketed and sold.

The scam to which he refers centers on the false claims that lab-grown diamonds are a more ethical alternative to natural diamonds. This is particularly evident in the negative marketing that many sellers of synthetics use. Having been in the diamond business for 40 years, you would be aware of the tremendous good that natural diamonds do for communities around the world, where millions of impoverished people are sustained through diamond mining — particularly informal diggers. Claiming that synthetics are more ethical than socially responsible natural diamonds means compromising the livelihood of those workers and their families.

Secondly, while it is true, as you mention, that synthetics offer consumers more affordable pricing, the article argues that consumers are being misled. Given that synthetics lack the rarity of supply that natural diamonds enjoy, we expect that prices of synthetics will decline as supply increases — and that means resale prices as well.

“Natural diamonds have natural scarcity, which enables them to be a store of value,” Mr. Rapaport explained. “Synthetic diamonds have no scarcity and are not a store of value. Consumers think they are buying a diamond with all of its attributes. They do not realize that they are buying something that does not hold value.”

Synthetics and natural diamonds are differentiated products not only because of the value they hold, but also because of what they represent. When a couple gets engaged, or celebrates a life event, the woman expects the man to give her something that will retain value, just like their relationship. Synthetic diamonds do not offer that same assurance.

Finally, it is worth stressing a point that Mr. Rapaport made in his article. If a retailer decides to sell synthetic diamonds, that retailer should be totally honest with consumers. This means letting them know that synthetics are not more ethical than socially responsible natural diamonds, and that synthetics will likely lose value over time.

In my view, honest players in both sectors can find their place in the market — as long as full disclosure is made to consumers.

Thanks again for your comment.

Avi Krawitz
News Editor
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Aug 1, 2017 5:28PM    By Patrick Fay
I have been a buyer and seller of Lab Grown diamonds for almost 2 years, and have been in the diamond business for 40 years. Lab grown diamonds are the best thing to happen to diamonds in a long time...consumers will reaping the benefits thru more affordable pricing. The only reason the mined diamond producers and sellers have a problem with because they just learned that their mined diamonds from DeBeers are grossly overpriced, and one should direct that blame on Rapaport who artificially inflates the prices of mined diamonds thru his diamond list. Also, The Rapaport Magazine cover story of a year ago where Rapaport declared lab grown diamonds a "scam" was disgraceful to the magazine and him personally because he wrote it. But, on the flip side he also alerted the "whole world" to lab grown diamonds and that was a good thing, because he let the cat out of the bag and "propelled" the lab grown business across all avenues! Furthermore, the GIA is in cahoots with minded sellers and Rapaport because they created different standards for grading lab grown diamonds even though as -Stephen ­Morisseau, Director, Gemological Institute of America (GIA) publicly stated "Synthetic diamonds are diamonds. They’re not fakes. They have all the same physical and chemical properties of a mined diamond.” so that begs the question why not grade them the same! And, the GIA keeps calling them "synthetic", they do this in an attempt to discredit lab grown diamonds to consumers...knowing that it is confusing terminology and may/will lead consumers to believe that lab grown diamonds are fake or CZ's. Shame on the GIA for deliberately confusing consumers. In closing the ship has sailed...I am on board with lab grown diamonds 100%, and in 5 years time...also will the majority of diamond buying consumers!! Patrick Fay Diamonds Inc, Chicago
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