April 5th, 2020
A recent article published by Edahn Golan Diamond Research & Data analyses how the global coronavirus crisis affects the diamond industry today, and how the industry could, and will, resurrect itself after the threat has passed.
Golan starts by crunching some recent numbers: Polished diamond exports from Israel fell 73% in February. In Antwerp, polished diamond exports fell 58% year over year, while polished diamond exports from India fell 41%. But, Golan stresses, while “the short-term is clearly terrible by all accounts, the apocalyptic long view is not justified”.
Historic Examples of Resurrection
Golan goes on to look at how the industry leaped after the events of 9/11: Diamond jewellery retail sales soared 20% in the US as Americans “rushed to propose” and get married, while gross polished diamonds imports into the US rose 15% in 2002.
Another example: A year after the global economic meltdown of 2008, diamond jewellery retail sales in the US increased by 3%, while 2010 proved to be a “fantastic year for the diamond industry”.
Yet another encouraging example is the resurrection after the 9.1 earthquake that hit Japan in March 2011, devastating many lives and the economy. By the end of the year, it was proved that the sales of diamond jewellery in Japan increased even when every other sector suffered a decrease in sales.
Coronavirus and Resurrection
As for the present crisis, Golan says, the “tendency to spend on diamond jewellery” in a response to large-scale deaths, disasters, and economic meltdowns, may repeat itself as “we experience a need to celebrate, outwardly express our love, and signify our triumph”.
The diamond industry, he says, “will no doubt fare well” as “all indications are there that not only will diamond jewellery sales rebound, but this is likely to happen even earlier than other industries, as past large-scale fallouts have shown”.
Following a year of “scaling back, improving efficiencies, and adjusting business strategies”, the diamond industry is prepared for a difficult year. Wholesalers, he says, should not give in to the temptation to wait for prices to rise; because, to generate cash flow, they may need to sell their goods at a loss. “This short-term loss is a life-line if done correctly”, says Golan.
Those smart during the crisis, he concludes, “will emerge on the other end better prepared for the new challenges and reap the benefits of a market resurrection that is surely to come”.