RAPAPORT... New York City is the gateway and point of distribution to the U.S., the largest diamond and diamond jewelry consuming market in the world. The American client is best served by New Yorkers who understand the needs of the domestic market and the challenges and risks of doing business in the U.S.,” said Ronald J. Friedman, president of William Friedman Diamonds and president of the Diamond Manufacturers & Importers Association of America (DMIA), at the recent Rapaport International Diamond Conference (IDC). Regarding the DMIA, he said, “Our mission, without agenda, is to promote diamonds in every positive way.”
Calling New York the international center of the big-stone market, Friedman pointed out, “From famous stones to the companies that are at the forefront of manufacturing and dealing with big stones, to the most well-known master cutters who are sought out to fashion rough stones into works of art, to their certification by the Gemological Institute of America (GIA), to the auction houses that often handle these most important stones, New York is involved in all of these aspects more than any of the other diamond centers combined. When you consider all these points put together, it is D-flawlessly clear that big stones are New York.”
Friedman also noted the many New York cutters, equally skilled but less well known, who operate below the radar. “All exemplify the passion, dedication and commitment of New Yorkers to produce the finest gems in the world.”
However, Friedman was not at the conference just to talk about the benefits of doing business in New York. He shared some concerns and observations on the current state of the market. “Lately, it has become fashionable for other international diamond centers and their organizations to look for ways in which liquidity can be brought to their markets,” he began.
Citing recent news reports, Friedman noted that diamond groups around the globe have reached out to their respective governments for aid to boost their manufacturing sector “instead of selling down inventory, reducing debt and finding other healthy ways of dealing with falling prices and reduced sales.” Mentioning the funding given by the governments of Russia, India and Belgium, Friedman cautioned that any manufacturer who has access to additional funds is likely to become more aggressive in bidding up prices for rough, creating “a very dangerous situation” where polished stocks accumulate unsupported by sales at retail.
“Ladies and gentlemen, be concerned with retail,” Friedman warned, “be concerned with speculation and be concerned with the possibility of a bubble.” For the long-term health of the industry, Friedman stated that the goal should be a sell-down of inventories, which creates liquidity. “Demand for polished should be a reflection of sales at retail. These are all remedial concepts of supply and demand,” he stressed.
In addition, Friedman remarked, “It is absolutely imperative that we work for meaningful margins.” Friedman believes that the manufacturers must make it clear to the producers that healthy margins build a healthy industry. “We must make sure that healthy margins are a part of the correction and the industry going forward,” he concluded.
Article from the Rapaport Magazine - October 2009. To subscribe click here.