April 7th, 2020
A large group of international diamond manufacturers and traders have come together in search of an independent third party operated polished diamond trading and buying platform, for diamond traders and retail jewellers worldwide.
The initiative was established on March 20, 2020, in response to a revision in the Rapaport Group’s (RG) price list, which saw RapNet listed prices drop between 5%-9% across most diamond categories.
The price changes were thought by some of RapNet’s members to significantly devalue their inventory causing some to remove their stock from the platform in protest.
As a direct result, the group of diamond manufacturers and traders published an open letter to the industry on April 2.
According to the group of traders, the current slow trade of polished diamonds is the direct result of the “crippling effects” of nations under total lockdown due to Coronavirus, not by supply and demand fundamentals.
The traders argue the latest polished diamond prices published by the RG do not reflect trading prices in the global wholesale diamond market.
In the letter, the traders say “RG’s actions are further proof that, over the years, it has operated and dictated polished diamond prices in a non-transparent manner, revising prices upwards or downwards, without offering any guidance, let alone a mechanism or rationale that lies behind its decision-making process.”
Consequently, the diamond traders jointly announced that they would use the RG’s polished diamond price index as published on March 6, 2020, “as a reference point until a new, independent, non-biased and transparent alternative would be presented to the diamond industry.”
Meanwhile, the World Federation of Diamond Bourses (WFDB) announced that a state-of-the-art, “cross-bourse” trading platform is under development. It will very soon be available for the diamond industry and trade at large.
Speaking on behalf of the WFDB, Yoram Dvash, president of the Israel Diamond Exchange, advised that those who wish to post their stocks elsewhere in the interim could do so on the trading platform of Get Diamonds.
The group of diamantaires who initiated the drive for an alternative trading platform began organising their initiative on Friday, March 20, using social media channels such as WhatsApp and Instagram.
Reportedly, within hours, diamond traders and manufacturers from the major diamond trading hubs of Mumbai, Antwerp, Tel Aviv, New York, and Dubai came together, sharing grievances and objections to the RG’s newly published round and fancy polished diamond price index.
As a consequence, more than 500 diamond traders and manufacturers, among them most of the world’s leading diamond firms, have voluntarily removed their polished diamond inventories from the platform, stating that as a collective, they no longer wish to depend on the RG’s trading platform and price index. They meanwhile are posting their stocks on other existing platforms.
The group estimates about 70% of the original polished diamond inventory was removed by the diamond trade, close to $6 billion (£4.8m) worth of polished diamonds.