Diamond Industry Facing Problems Across the Board

Reuters reported that the diamond industry is facing a number of problems. For instance, the family businesses that make up the global diamond trade have taken a hit in terms of profits, while diamond cutters and polishers are caught between miners who charge high prices for rough stones and retail chains that want to buy finished gems at low prices.

As quoted in the market news:

While the $80 billion overall spent on diamond jewellery last year was a record, the manufacturers are expected to share a profit of just $100-million in 2015. That is half last year’s total and down from $900-million in 2010, according to Chaim Even-Zohar of Tacy Ltd and Pranay Narvekar of Pharos Beam in Mumbai, two of the industry’s top consultants.

Even-Zohar estimated that 300-000 Chinese and Indian workers had been laid off out of nearly 1-million employed in gemcutting in those two countries, where most manufacturing takes place.

‘The rule of supply and demand doesn’t necessarily apply to the diamond sector,’ said Yoram Dvash, a high-end polisher in Israel who outsources his rough stones to smaller Israeli polishers.

Over the past year he has been sending his subcontractors 20% less volume.

‘Manufacturing is not just work, it’s out of love – taking the rough stones, with all their odd shapes, and bringing out the most precious thing in the world. But this love costs a lot of money. And rough prices have been going up and up with no connection to demand.’

Click here to read the full Reuters report.