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Positive Momentum
By Avi Krawitz
Enthusiastic trading in the Israel Diamond Exchange (IDE) continued in April after the industry posted its strongest quarter in three years, for the three months that ended on March 31, 2011. “The Israeli diamond industry is back in full swing,” said Moti Ganz, chairman of the Israel Diamond Institute Group of Companies (IDI). “The steady growth proves that we are well on the way to a full recovery.”Ganz added that his assertion was backed by recent data published by the Ministry of Industry, Trade and Labor, which showed polished exports rose 46 percent year on year to $2.12 billion, the highest level recorded since the first quarter of 2008. The average price of exports rose 30 percent to $2,270.64 per carat. Polished imports increased by 48 percent to $1.23 billion.IDI Managing Director Eli Avidar noted that the uptick in trade was also reflective of Israel’s participation in various trade shows during the quarter, including those in Mumbai, Vicenza, Hong Kong and Basel. “The Israeli diamond industry has been very well received at each of these shows, and the business results have been very good,” Avidar said. “We are looking forward to a very promising year.”Strong TradingHaim Katz, owner of Haim Katz Diamonds, which buys diamonds of .30 carats and up from Indian partners to sell in the U.S. and the Far East, noted that the momentum created by those trade events filtered through to Ramat Gan, with strong trading in the bourse during March and most of April, even as activity quieted for the Passover holiday break at the end of the month. “The market is very strong, with demand mainly coming from China and India, while demand within the bourse is also very good,” Katz said. “The U.S. is also much better than what it was, but it’s the East that’s driving business.”Reuven Kuvent, general manager of research company Dun & Bradstreet Israel, urged the trade not to forsake the U.S., as it will remain one of the most important markets in the next two decades.“By 2030, the Chinese economy will be the largest in the world, the U.S. will be second and India will have the third-largest economy,” Kuvent said in his address to the industry at the launch of IDI’s 2011 strategic campaign at BaselWorld. The campaign is entitled “Welcome to Israel” and it stresses that the industry wants to welcome customers to Israel, whether in Basel, at other diamond and jewelry shows, online or actually visiting the country.Kuvent called on the industry to cultivate each of the three major markets — China, the U.S., and India — for the future, even though the U.S. might seem less attractive now due to poor economic performance. Israel remains the largest exporter of polished diamonds to the U.S. as exports there rose 22 percent to $694.2 million in the first quarter. Exports to Hong Kong grew 28 percent to $506.1 million.Katz reported that demand is spread from .3-carats to 3-carat goods, mainly in the VS to SI clarities, while there is some demand for VVS clarity stones in the lower colors. He also noted that a shortage of polished is helping spur the market.Rafi Yerushalmi, co-managing director of Dalumi Group, a manufacturer of all size diamonds and jewelry, agreed. He reasoned that the shortages resulted from some people holding onto their rough, rather than using it in manufacturing, and from the fact that the Indian manufacturing sector is still not operating at full capacity.Too Good To Be TrueYerushalmi expressed concern that the strong trading environment may not reflect the true state of the market. “The market is strong and may be too good to be true because the polished is booming but you can’t find rough at the right price,” he said. “But it’s all part of the normal cycle of the diamond business.” Yerushalmi stressed that ultimately the state of the market will depend on whether the end consumer can afford the resulting higher jewelry prices.Marketing CampaignAs part of the “Welcome to Israel” campaign, IDI is planning to open a new office in the Bharat Diamond Bourse in Mumbai, expand its participation in trade shows, particularly in India and Hong Kong, and establish an Israeli rough diamond sourcing group.In other marketing innovations, IDI launched a new free iPhone and iPad application enabling dealers to respond to diamond requests made on the IDI portal. The application also features a directory of Israeli diamond companies, banks and gemological laboratories.“The only way for the Israeli diamond industry to compete is to make use of our own natural resources — the creativity and resourcefulness of our people,” Avidar said. “These natural resources have helped Israel maintain its competitive edge in so many fields, including the diamond industry.”The Marketplace- Positive trading continues, but slowed at the end of the month for the Passover holiday.
- Hopes are high that JCK Las Vegas will continue the positive sales trends seen in Hong Kong and Basel.
- Demand is good for .30-carat to 3-carat, VS-SI goods.
- VVS clarities in the lower colors are in demand.
- Demand is good for rough, despite its high price.
Article from the Rapaport Magazine - May 2011. To subscribe click here.
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