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Israel
By Avi Krawitz
Israeli polished diamond dealers and suppliers returned from the JCK Las Vegas show confident that the U.S. market is stable and will provide a foundation for steady trading in the second half of the year. However, activity in the Israel Diamond Exchange (IDE) remains cautious due to weaknesses in other markets. “The U.S. market is stabilizing and the mood is much better,” said Jacob Kattan, a member of the IDE board and owner of JKD-Kattan Diamonds, which manufactures round and fancy shapes of .50-carat stones and larger. “People are still cautious but you feel an optimism and will to do business that has been absent in the U.S. in the past few years.” With the U.S. Israel’s largest market for polished diamonds, Israel hosted a large pavilion of suppliers at the JCK show. Many Israeli dealers also came to Vegas to buy goods as the U.S. has shifted to become a steady source of polished supply for the Israeli market in recent years. However, Kattan noted that it wasn’t easy to buy goods in Vegas this year. He reasoned that there is a block in trading certain goods because people are holding onto their merchandise due to some upward price expectation. “People are holding less inventory than before and they are hearing that there are shortages in certain categories of polished. Add to that the fact that rough is expensive,” he noted. “So polished prices were stable and suppliers at the show did not sell cheap.”
While positive sentiment from the show helped lift the mood in Israel, it was fairly short-lived because trading remained relatively low due to slower demand in India and China. There were fewer Indian buyers in Israel in June because the weak rupee influenced them to focus on the Mumbai market for goods. Trading was further dampened when the local tax authorities resumed their investigations into disclosures of foreign exchange banks and businesses operating in the bourse. Ranjeet Barmecha, chief executive officer (CEO) of Niru Group, which specializes in baguettes, tapers and princess cut diamonds, expressed concern that Israel is losing market share. He stressed that the biggest challenge facing the local industry is the lack of a younger generation entering the workforce and the recent reduction in bank financing. “If you want to ensure an industry here, you need to bring in young blood but it’s not easy because the market isn’t profitable,” Barmecha explained. “There’s no profit in rough and we don’t get the support from the banks that would enable growth.” In contrast, Barmecha noted that the industry does enjoy strong support from government and the industry infrastructure. Still, Barmecha reported that 2013 has been a positive year so far, particularly for fancy shapes that are gaining in popularity. He noted that when round prices rose, people moved to fancy shapes, and that trend has continued this year. “We’re quite optimistic about 2013,” he added. “We don’t see low demand for our product.”
While Far East demand has been cautious this year, Israeli diamantaires have turned their attention toward Hong Kong, with 70 companies participating in the Israel pavilion at the June show, which took place after press time, making it the largest diamond pavilion at the show. Moti Ganz, chairman of the Israel Diamond Institute Group of Companies (IDI), stressed that Hong Kong remains vital to Israel’s diamond industry growth plans. “Hong Kong, as a gateway to Asia, has become a major marketing focus for the Israeli diamond industry,” Ganz said. “We believe in the economic future of this region and the growth in demand for diamonds and diamond jewelry here. We’re pleased that the Israeli industry is playing an important role in supplying this demand.”
Jovella, Israel’s international jewelry and diamond exhibition, is celebrating its tenth anniversary this year, with approximately 250 exhibitors participating. The show includes a small loose diamond section, with a stronger focus on gold jewelry, gold set with diamonds and precious stones, silver jewelry and fashion jewelry. “This year, our tenth anniversary, we expect a record participation of buyers from abroad,” said Israela Stier, CEO of the Stier Group, one of the organizers of Jovella. “Israeli jewelry has a lot to offer, especially with consumers’ heightened interest in silver and fashion jewelry. With Israeli jewelry designers having made important inroads into international markets, we believe that buyers will flock to Tel Aviv this year to seek the next big thing.” The Israel Jewelry Manufacturers Association reported that the U.S. is Israel’s largest market for jewelry sales, followed by Europe and the Far East. Among the country’s key jewelry export markets are Russia, the UK, Hong Kong, Canada, Belgium, Italy, Spain, France and Japan.Article from the Rapaport Magazine - July 2013. To subscribe click here.
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