Waldman Diamond Company

As expected Israeli polished exports dip 15% in first half, now is the time supplier-client relations are tested says Waldman
July 27, 2001

RAMAT GAN, ISRAEL - Israeli polished diamond exports slipped by 15 percent during the first six months of 2001, according to figures just released by the Ministry of Industry and Trade in Jerusalem. Nonetheless, few in the industry were caught by surprise, with the general consensus being that this time the analysts had been right on target. Exports of polished goods were down as they predicted in January, following the record-breaking totals reported in 2000, which was the best year ever recorded in the Israel diamond industry's history.

In total, a net sum of 1.97 million carats of polished diamonds worth $2.28 billion were exported during the first six months of 2001, compared to 2.42 million carats worth $2.68 billion during the same period a year earlier.

However, the picture was less uniform in the other benchmark categories reported on by the ministry of industry and trade.

Rough diamond imports rose 35 percent in weight, but fell 21 percent in value. This, explained the Diamond Controller, the Israeli government's chief regulatory officer, was due to imports of what are called "run-of-mine" diamond parcels, which are large packages of unsorted rough that are imported directly from mines in Africa.

The Diamond Controller took care to emphasize that all rough diamond imports are subject to the strict procedures that are currently being enforced to avoid the possibility of "conflict diamonds" reaching Israel.

According to market reports, up until June of this year, the United States, the world's primary destination for polished diamond market, and in which Israel holds an almost 50 percent market share, there existed a considerable "overhang" of polished goods. It was largely created by goods that had been purchased toward the start of the 2000 holiday season, and had remained in the vaults of wholesalers, jewelry manufacturers and retailers after the subdued sales period that followed.

So what can we expect for the second half of the year? Will the American market begin buying larger quantities of polished goods to refill the emptied vaults?

"I think the matter is slightly more complicated than that," said Alexander Waldman, the CEO of WDC Group, an international diamond manufacturer and trader. "The downstream market is wary of building up inventory, and it is seeking to keep the stock in the vault at the lowest level possible. That trend undoubtedly puts enormous pressure on the diamond dealers and manufacturers and it predominantly is the better established firms who are able to support the marketing, without sacrificing the level of the services offered."

Waldman said that it is now the true strength of the long-term relationship between diamond sellers and diamond buyers is proven. "Our company," he said," will continue to work with our customers along the same principles and methods we have applied in the past, both in good time as well as in times of difficulty."