Hundreds of diamond traders come together during COVID-19
A large group of international diamond manufacturers and traders have come together in search of an independent, transparent, innovative third party operated polished diamond trading and buying platform, for diamond traders and retail jewelers worldwide. The initiative was born on March 20, 2020, immediately after the Rapaport Group (RG), which operates the diamond industry’s leading polished trading diamond platform and price index system, unilaterally adjusted prices downwards for about 95 percent of the categories listed in the round and fancy polished diamond price index of March 20, with an average of five to seven percent, across the board. The RG’s unilateral adjustment of its price index caused an unparalleled uproar in the global diamond trade. The group published an open letter to the industry, which is printed below.
Consequently, the diamond traders listed below jointly announced that they would use the RG’s polished diamond price index as published on March 6, 2020, as a reference point until a new, independent, non-biased and transparent alternative would be presented to the diamond industry.
Meanwhile, the World Federation of Diamond Bourses (WFDB) announced that a state-of-the-art, “cross-bourse” trading platform is under development ( www.get-diamonds.com ). It will very soon be available for the diamond industry and trade at large. Speaking on behalf of the WFDB, Yoram Dvash, President of the Israel Diamond Exchange, advised – in a letter sent to the trade – that those who wish to post their stocks elsewhere in the interim could do so on the trading platform of Get Diamonds .
The group of diamantaires who initiated the drive for an alternative trading platform began organizing their initiative on Friday, March 20, using social media channels such as WhatsApp and Instagram. Within hours, diamond traders and manufacturers from the major diamond trading hubs – Mumbai, Antwerp, Tel Aviv, New York, and Dubai – came together, sharing their grievances and objections to the RG’s newly published round and fancy polished diamond price index. The arguments voiced by participants in the online discussions were, among others, that over the years, the RG has operated the trade’s leading price index system in a non-transparent manner and had dictated polished diamond prices, revising them upwards or downwards, without offering any guidance, let alone explaining the rationale or mechanism that lies behind its decision-making process. The current slow trade of polished diamonds is the direct result of the crippling effects of sovereign nations under total lockdown, not by supply and demand fundamentals. Therefore, the latest polished diamond prices published by the RG do not reflect trading prices in the global wholesale diamond market.
The group members consequently resolved to remove their polished diamond inventories from the platform, stating that as a collective, they no longer wish to depend on the RG’s trading platform and price index. They meanwhile are posting their stocks on other existing platforms.
Open Letter to Our Colleagues in the International Diamond Industry and Trade
April 2, 2020
The pandemic caused by the Covid-19 virus has brought almost the entire world as we know it to a standstill. While China seems to be slowly recuperating from the impact of the pandemic, in other parts of Asia and the western world, the pandemic is still raging, claiming thousands of victims a day.
Of course, like many other sectors, our industry, the international diamond industry and trade, also has ground to a halt. Throughout the diamond supply pipeline, business activities have ceded. All around the globe, diamond mines have been put on care and maintenance, while business activities in the midstream (manufacturing and trade) and the upstream (the retail jewelry sector) have dwindled to a trickle.
These developments are unprecedented, and we’re all learning to confront the challenges the pandemic is presenting to us, both in our personal lives as well as our businesses. Of course, we wish all our colleagues the strength and stamina needed to see this crisis through and, above all, good health.
Therefore, in light of the above, we, the undersigned to this letter, were shocked and extremely disappointed to discover that on Friday, March 20, the Rapaport Group (RG), the owner and publisher of industry’s leading polished diamond price index system, had unilaterally adjusted polished prices downwards for about 95 percent of the round and fancy polished diamond categories listed, marking prices down on average and across the board with approximately seven percent.
Price changes in either direction should be a reflection of actual trading prices and the volumes of polished diamonds bought and sold. RG’s action of March 20 was, unfortunately, made without regard to either. We are alarmed and troubled as to the methodology and timing of establishing and setting market prices without trading activity in the market. RG’s actions are further proof that, over the years, it has operated and dictated polished diamond prices in a non-transparent manner, revising prices upwards or downwards, without offering any guidance, let alone a mechanism or rationale that lies behind its decision-making process.
The current slow trade of polished diamonds is the direct result of the crippling effects of sovereign nations under total lockdown, not by supply and demand fundamentals. Therefore, the latest polished diamond prices published by the RG do not reflect trading prices in the global wholesale diamond market.
Within days, a large group of diamond traders and manufacturers from the major diamond trading centers Antwerp, Dubai, Mumbai, New York and Ramat Gan (Israel) – a group much larger than the companies that signatories to this open letter – have come together to voice their resistance and rejection of RG’s actions. Collectively, they no longer wish to depend on the RG platform and price index. Also, they have resolved that the RG price index, as published on March 6, 2020, will serve as a reference point for future diamond trading until a new, independent, non-biased and transparent reference would be presented to the diamond industry.
Since rallying behind this unique, “popular uprising,” more than 500 diamond traders and manufacturers, among them most of the world’s leading diamond firms, proceeded to remove their polished diamond inventories from the RG trading platform. At this point, it is estimated that about 70 percent of the original polished diamond inventory was removed by the diamond trade, i.e., close to $6 billion worth of polished diamonds. Each respective company did this voluntarily.