The merchants fear a fall in the value of their diamond inventories.
International diamond syndicate De Beers, which controls 55-65% of the world’s diamond trade, is reducing prices of rough diamonds by 5-7%. The price cut will go into effect as from this week’s allocation (allocations are made once every five weeks). Diamond sector sources fear that the decision will cause losses to Israeli rough diamond merchants, who will find themselves stuck with inventory at high prices.
Israeli diamond merchants are concerned that a reduction in the price of rough diamonds could lead in turn to a fall in the prices of polished diamonds, a development that will cause a slump in prices and damage to the already troubled Israeli diamond sector.
Published by Globes [online], Israel business news - www.globes.co.il - on July 19, 2006
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