NEWS

India opens "largest diamond exchange"

India has opened what has been called the world's largest diamond trading centre this week in Mumbai.
 
With the new state-of-the-art infrastructure, the country hopes to compete with other major exchange hubs like Antwerp and Tel Aviv.

Prerna Suri reports on how one of the world's leading diamond manufacturing centres is vying to take its place in the industry to a new level.

This exchange far exceeds those of Tel Aviv - Israel, or Antwerp - Belgium, in sheer size.

Banking, shipping and all diamond related facilities will be available to manufacturers, dealers, traders and buyers within the confines of Mumbai's new diamond complex.

A shortage of many qualities of polished diamonds has been created throughout the world as a result of the dramatic and unprecedented increase in demand by local Indian consumers for these precious gems.

This situation has created interesting and exciting new opportunities for other diamond centres around the world, and in particular those of Israel and Belgium.

I recently returned from the 34th World Federation of Diamond Bourses (WFDB) world congress in Moscow, Russia.

Attending such a function is always such an eye-opener. The incredible calibre of attendees, people from all over the world, all with a common interests......diamonds.

The key focus was without doubt the situation faced by the World Diamond Council and the WFDB in respect to the Marange mines in Zimbabwe. At this point in time we are aware that under the Kimberley process agreements were reached which enabled the mine to receive its restricted certification whilst it meets stringent criteria.

In real terms what this reflects is the strength, commitment and absolute determination by all parties involved in the diamond industry today to understand the importance that we will not succumb to those who will attempt to use diamonds to profit and finance their political ambitions to the detriment, destruction and abuse of innocent women and children in their countries.

One of the highlights for the Diamond Dealers Club of Australia (DDCA) was the invitation to present to the WFDB Congress a strategy by which the WFDB Mark could be redirected towards the retail trade, and build on this to become an internationally recognized symbol of credibility amongst consumers. We were able to present a concept which incorporated the latest internet strategies and leverage the existing strong membership of the WFDB.

The idea was well accepted and supported, I've personally been asked to lead a group to develop the feasibility and potentially implementation of this project.

Both in Moscow and St. Petersburg discussions were brought up again about generic marketing and its importance, it was discussed about the International diamond board being discussed two years ago and again nothing is happening ,there is no doubt that this is critical as we must recapture and grow our segment of the luxury market. It is this exact need which is the basis for which the DDCA presented their strategy.

The overall feedback from the industry was that although the last 18 months were incredibly difficult, the industry was in relatively good shape. From a diamond production perspective the model which was and has always been in place that of tendering diamonds, is still considered essential as it is the only way that large manufacturers can guarantee supply of product to their factories and guarantee their employees continual work. The idea that there is tenders and/or auctions was considered by many to be a sickness in the industry and it would remove small and medium-sized companies in the future, as this method detracts from a diamond manufacturers ability to plan ahead, which is true of any manufacturing industry which cannot be sure of its future supply of rough materials.

There is no doubt that there will be a move to tightening credit terms in every point in the supply chain as the idea that accounts receivable have moved to 240 days is ridiculous to say the least. Currently there is a roughly 10 billion dollar credit in the market place today. 

More and more all bodies understand the importance and significance of supporting consumer confidence, and this will continue to be a focus to our industry.

Shanghai was host city to the 33rd World Diamond Congress (WDC), the biennial gathering of the general assemblies of the World Federation of Diamond Bourses (WFDB) and the International Diamond Manufacturers Association (IDMA), from May 12 through May 15.

Lin Qiang, president of the Shanghai Diamond Exchange (SDE), told the congress that in the last two decades, China has grown into the worldís fourth-largest consumer of diamond jewelry and the second-largest global diamond cutting center after India. In 2007, SDEís trading volume totaled $1.07 billion. Its turnover reached $282 million in the first quarter of 2008, up 43.8 percent from the same period in 2007.

We are aiming to become one of Asia's or even the world's leading marketplaces, said Lin. SDE is the only diamond exchange in China, with 215 members to date.

Diamond Exchanges Admitted

In significant congress business, the WFDB General Assembly voted to accept three diamond exchanges: the Diamond Dealers Club of Australia, the Istanbul Gold and Diamond Exchange and the Panama Diamond Exchange, bringing the total number of WFDB member bourses to 29.

In his final report as outgoing WFDB president, Ernie Blom said All three organizations are located in countries that are not yet served by a diamond exchange, and all three serve regions with excellent potential. The Australian bourse will be located in an affluent market that reaches beyond the country into the markets of New Zealand and the South Pacific. The Turkish bourse is situated in the heartland of one of the worldís most rapidly growing consumer markets that is expanding its tastes from gold into diamond-set jewelry. The Panama bourse sits at the gateway to an entire continent that is not yet served by a single, local diamond bourse, and that recently was cited by De Beers Managing Director Gareth Penny as a diamond market of the future.

Noting that It is the stated objective of the WFDB to encourage the establishment of diamond exchanges in all developing markets, Avi Paz, WFDB president, added Each one of the new bourses provides our business with expanded reach in markets with great potential.

In discussions with RDR, Erez Akerman, president of the Panama Diamond Exchange, said that Latin America is a huge market but has been underestimated, untouched and neglected for many years.

IDC Rules Recognized

In other industry business, the World Jewellery Confederation (CIBJO), in a joint statement with WFDB and IDMA, stated that it recognized and respected the revised International Diamond Council (IDC) Rules for Grading Diamonds. Under the new IDC rules, gem-quality diamonds created in a laboratory or factory can be described as: synthetic, laboratory-grown, laboratory-created, or man-made, and the descriptor must always be followed by the word diamond or diamonds. Under no circumstances can the term cultured be used to describe gem-quality synthetic diamonds.

Paz also updated the congress attendees on the WFDB Mark Programme, noting a significant increase in the number of individual bourse members applying for personalized WFDB Marks in recent months. Seven WFDB Mark Associate Members were honored for their contributions to the WFDB Mark Programme, including Antwerp World Diamond Centre (AWDC) and Rapaport Diamond Report.

Sergey Vybornov, president of ALROSA, delivered the congressí keynote speech, emphasizing the need to develop a cohesive marketing policy for diamond jewelry and expressing his companyís readiness to invest in a joint industry effort.

During the congress, IDMA announced the launch of the global diamond marketing and promotion campaign to raise awareness of the need for effective advertising and promotion of polished diamonds and diamond jewelry, and to drive increased consumer demand. IDMA reconfirmed its commitment and support for the Diamond Development Initiative, and its commitment to remain involved in the Council for Responsible Jewellery Practices (CRJP).

IDMA also accepted two new members Armenia and Botswana and announced it also has received a membership application from Namibia.

Elections

Paz was elected president of the WFDB. Outgoing president Blom was elected vice president and named a Lifetime Honorary President of the WFDB. The other elected officeholders included Michael Vaughan as secretary general, Dieter Hahn as treasurer general and Freddy Hager as deputy treasurer general.

IDMA elected Moti Ganz its new president and Ronnie Vanderlinden its new secretary general. Jeffrey Fischer, the outgoing IDMA president, was appointed Honorary President.

In a ceremony at the congress, WFDB named its former president, the late Moshe Schnitzer (1921-2007), as the first WFDB Diamantaire of the Year.

The World Federation of Diamond Bourses is essentially a family of diamond traders, who need to communicate, liaise and plan common strategies on an ongoing basis, and not only on those occasions when we meet at World Diamond Congresses and Presidents Meetings, said Paz in his concluding statement.