In a statement issued to the diamond industry via email, Rapaport Group chairman Martin Rapaport suggested De Beers Group had been a major force influencing market conditions.
“De Beers is moving forward in the right direction by reducing rough prices sufficiently to enable increased sales of rough diamonds and a resumption of diamond manufacturing activity,” Rapaport stated.
Late last year, Rapaport released a controversial industry commentary that blamed the unprofitable state of the diamond industry largely on De Beers. He claimed the company had artificially manipulated rough diamond prices to high, unsustainable levels, and called on De Beers to reduce rough diamond prices by 30–50 per cent and for chief executive Philippe Mellier to step down.
In his recent statement, Rapaport acknowledged that De Beers had lowered rough diamond prices by 15 per cent in 2015, estimating a further decrease of 7–10 per cent in the current sales cycle.
“We encourage De Beers to maintain a consistent level of rough diamond supply at price levels that ensure reasonable sustainable profitability to diamond manufacturers,” he said.
“De Beers must not repeat their mistakes of last year by overpricing rough diamonds that result in a sharp decline in diamond manufacturing, polished shortages and bullwhip effects that increase volatility and uncertainty.”
Rapaport described the outlook for polished diamond prices as “mixed” but said that if De Beers continued “on a responsible path”, polished diamond prices would adjust to accurately reflect demand, leading to the emergence of a “healthy” diamond market.
“We are not out of the woods yet, but we are headed in the right direction and it looks like the worst may be over,” Rapaport concluded. “2016 has the potential to be a great year for the diamond industry as profitability and responsibility returns to the diamond supply chain.”
In other diamonds news, the World Federation of Diamond Bourses (WFDB) recently revealed the key themes for the upcoming 2016 World Diamond Congress, the biennial meeting of the WFDB and the International Diamond Manufacturers Association (IDMA).
”Given the challenging conditions facing the diamond business, this year’s meetings will be all the more important,” WFDB president Ernie Blom stated. “We will be discussing how to create sustainable, long-term growth in the diamond supply pipeline, while bearing in mind the need for transparency, the highest levels of ethical behaviour and corporate social responsibility.”
Blom said the meeting would also focus on advancing generic diamond marketing via WFDB’s World Diamond Mark initiative; strengthening links with the Diamond Producers Association; and on how the diamond jewellery sector could increase its competitive position and share the luxury consumer market.
The 2016 World Diamond Congress will be held in Dubai, the United Arab Emirates, from 16 to 19 May.
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