Rapaport Magazine

Israel

By Avi Krawitz
Locals Dominate Diamond Week

The U.S. and International Diamond Week in Israel set a positive tone in the bourse at the beginning of April even if trading was relatively slow. The event, which took place from April 6 to 10, demonstrated steady interdealer trading as the leadership of the Israel Diamond Exchange (IDE) sought to reinvigorate activity on the bourse trading floor.
   “This is a good event because it brings people to the bourse and promotes the local industry,” said Roi Nisenbaum, a sales manager at Nimri Diamonds Ltd., a manufacturer specializing in fancy shape diamonds. He agreed with other sellers that there were fewer foreign buyers at the event than in previous years. “We need to bring more buyers from overseas, but there was action — mostly between Israeli traders.”
   One explanation for the decline in foreign attendance could be that dealers had already bought goods at the crowd of shows that preceded the diamond week event. The March Hong Kong show was followed by The Diamond Show and BaselWorld shows in late March and early April and many Israeli suppliers also attended the Gem & Jewellery Fair–Europe that took place in Freiburg, Germany, from April 1 to 4.
   “People came back from Hong Kong satisfied, but Freiburg was not great,” said Yoram Siman-Tov of Siman-Tov Bros, a dealer in fancy color diamonds. “In general, there are too many shows at this time of year.”
   Another contributing factor to lower overseas buyers was a strike at the Israel Foreign Ministry that prevented many foreign buyers from receiving travel visas in time to attend the show. The 11-day strike by Israeli diplomats brought most services at Israeli consulates and embassies abroad to a standstill until April 2, just days before the start of the diamond week in Israel.

Selective Market
   Still, organizers reported they had 350 foreign buyers from 20 countries registered for the event, while nearly 400 suppliers operated booths with a total $1 billion worth of goods on offer. In an effort to attract attendance, the IDE footed the bill for buyers’ hotel rooms and sellers did not have to pay for booths or advertisements.
   Avner Sofiov, president of Tzoffey’s 1818, which held a polished diamond and gemstone auction at the event, said he didn’t see as many quality buyers as he had at the first two diamond weeks that took place in Israel in 2013. “The market is average, with certain items in good demand,” Sofiov said. “There is business, but buyers need to know what they want. The market has become selective and people will pay high prices for the goods that they want.”
Sofiov reported that there is good demand for special stones with fancy color, especially pink and blue diamonds, and a lot of interest in unheated precious gemstones.
   Many noted that Israel’s strength in fancy color diamonds and in fancy shapes was demonstrated by the large volume of these goods on offer at the diamond week. Shmuel Schnitzer, IDE president, who is also vice president of the Israel Diamond Manufacturers Association (IsDMA), stressed Israel’s excellence in manufacturing fancy color diamonds. “As a leading manufacturing and trading center of this special category of natural diamonds, we are adding significant value and offering an important service to the downstream markets,” Schnitzer said.

Focus on Niche Goods
   Some dealers expressed concern that Israel is too focused on niche products such as fancy color diamonds, fancy shapes and large stones. “We don’t see so much smaller goods in Israel anymore,” said an India-based trader who has an office in Israel and who asked to remain anonymous. “As a result, the European buyers who used to come to Israel for smaller commercial goods don’t come here anymore. They go primarily to Antwerp” for those goods.
   Still, most were satisfied that the diamond week provided a strong marketing push for Israel as a diamond center and an opportunity for Israeli traders to see what their neighbors in the bourse are doing.

Natural is Real
   In the days prior to the event, IDE launched a campaign to promote Israel as a center for natural diamonds, taking aim at the growth of synthetic diamonds entering the market. IDE adopted the slogan “Natural Is Real” for the diamond week, which Schnitzer explained sends a clear message to the market that “Israel’s diamond trade is all about natural diamonds.”
   In 2013, the IDE board voted to ban the trading of synthetic diamonds on the IDE trading floor. “The IDE trading floor is the most active and vibrant bourse floor in the world,” Schnitzer said. “We just don’t want to see synthetic diamonds on the trading floor.”

Article from the Rapaport Magazine - May 2014. To subscribe click here.

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