The Israel-based Fancy Color Research Foundation (FCRF) was formed to promote fair trade, ethics and transparency in the coloured diamond retail, wholesale and mining industries, and to assist members of these sectors with the coloured diamond valuation process.
FCRF initiator and board chairman Eden Rachminov explained that the launch of the foundation had been in response to increased sales in coloured diamonds and the resulting need for greater education, understanding and clarity in the industry.
“The process and skills for evaluating fancy colour diamonds are unique to this exceptional product,” he said. “As a result there is a need to clarify misconceptions and to highlight the differences to evaluating colourless [white] diamonds.”
It was said that the foundation would aim to achieve this by publishing educational information, promoting fair trade using reliable data analysis, and developing research and digital tools to support the coloured diamond retail selling process.
The Fancy Color Diamond Index
The first tool the FCRF released was the Fancy Color Diamond Index, which had been developed from “tens of thousands of fancy colour diamond transactions since 2005”. Specifically, the pricing data was collected from Hong Kong, New York and Tel Aviv.
“These three geographical areas represent the largest wholesale fancy colour centres that distribute diamonds to all parts of the world,” Rachminov stated. “Fluctuations in the wholesale market has a direct impact on prices across the industry chain down to the end consumer worldwide.”
Rachminov told Jeweller that prior to the development of the index, jewellery retailers had had no “objective platform based on real data” to help them navigate the complexities of selling coloured diamonds.
“There has never been a way to truly verify the value of a fancy colour diamond based on past market performance,” he said. “Until now, prices were based on word-of-mouth and rumours.”
Background reading: New trends increase coloured diamond demand
With the new tool, Rachminov said jewellers could now purchase coloured diamonds with greater confidence and update the prices for their existing inventory using estimates rather than ‘guesstimates’.
He added that the index could also be used to explain the investment benefits of a coloured diamond product to a customer during the sales process, and to help retailers better understand market behaviour.
“In addition to publishing the index, the FCRF is developing and publishing a series of practical tools, targeted at retailers,” Rachminov said. “We are confident that the FCRF will be a significant influence on increasing demand within the fancy colour diamond industry.”
FCRF membership is open to retailers, auction houses, wholesale traders and manufacturers, financial institutions, insurance appraisers and mining companies of any country.
Further information: www.fcresearch.org
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