"The diamond industry is the best place to be in during times like these," De Beers Diamond Trading Company (DTC) sales director Varda Shine told "Globes", in an effort to rebuff reports that the industry is in crisis because of the global economic situation.
Shine said, "Diamonds are a tangible product, a luxury item that expresses emotions, which is why they have greater value than other luxury goods. The value of diamonds is expected to rise because when looking at demand compared with supply, there's a very wide gap looking ahead three or four years."
Shine added, "No large diamond mine has been discovered in the past 20 years, and diamond reserves in the ground are shrinking. On the other hand, the increase in the middle class in China and India is boosting demand for diamonds."
However, a sign that the diamond industry is in crisis is companies' switch from working with large diamonds to small ones. The Israel Diamond Exchange has concentrated on large diamonds over the past 70 years. Shine says, "Small diamonds are more resistant to recession. The Chinese middle class doesn’t yet have enough disposable income to buy large diamonds, but that will change."
Published by Globes [online], Israel business news - www.globes-online.com - on November 23, 2008
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