Diamond trade hit by lack of credit, low profits

Ramat Gan--Israel exported only slightly more polished diamonds in 2014 than it did in 2013, as the diamond industry faced “major challenges” worldwide. 

According to data released Monday by Israel Diamond Controller Shmuel Mordechai, the country’s net polished exports in 2014 totaled $6.27 billion, an increase of 0.6 percent year-over-year. That is a marked slowdown from the growth the industry recorded last year, when polished exports jumped 12 percent amid higher prices.

Net rough exports rose 4 percent, from $2.94 to $3.06 billion, on the back of high rough diamond prices.

Israel’s total combined exports of polished and rough diamonds reached $9.32 billion, up 2 percent from $9.17 billion in 2013. 

On the importing side, Israel brought in $4.51 billion in polished diamonds, up 5 percent year-over-year, and $4.02 billion in rough, an increase of 0.8 percent.

Commenting on the 2014 figures, Moti Ganz, chairman of the Israel Diamond Institute Group of Companies, said they reflected the challenges facing the diamond industry around the globe, as well as the Israel-Gaza conflict that took place over a span of approximately 50 days in the summer and stalled business to some extent.

The issues faced by the diamond industry in 2014 included lack of access to credit, high rough prices and low profitability, particularly for manufacturers.  

Ganz said he expects demand for polished diamonds to increase in 2015 due to a “robust” U.S. market and renewed Asian growth. 

The U.S. market remained the top for Israel’s polished diamonds in 2014, accounting for 38 percent of the market, virtually unchanged from its 37 percent share last year. 

Hong Kong was next at 30 percent (up from 27 percent last year), followed by Belgium at 9 percent and Switzerland at about 6.5 percent, down from 9 percent last year. Diamond exports to Switzerland dropped in 2014 as that country experienced a slowdown in demand for its timepieces.  

England accounted for 4 percent of Israel’s polished diamond export.