Silver and diamonds - the "daily bread" of jeweler

GRINGOR is a St. Petersburg-based modern jewellery manufacturing company established in 2002. It successfully develops and implements the innovations, many of which resonate with the Russians and the people abroad. In 2012, GRINGOR was awarded the honorary...


Willie Nagel, a gentleman, who would have the strength and stamina to deal with business leaders and politicians, passes away

By Alex Popov

Willie Nagel passed away on July 14th. Friday he was buried in Israel. I was flying from New York with a stopover in London when it happened. Being unable to be there and express my feelings to Adam and Toni, I would like to...

20 july 2021

Diamond industry's reaction to KP impasse

The Kimberley Process Civil Society Coalition (CSC) recently said that it is planning to approach the United Nations (UN) over the impasse on the redefinition of conflict diamonds and the principles of responsible sourcing. The CSC representative...

19 july 2021

Natural and LGDs are two segments of the industry that will have to learn to coexist together

Having now completed half a decade in the diamond jewelry exporting and wholesaling industry, Anmol Bhansali received formal training on Diamonds from GIA in addition to a lengthy training in jewelry wholesaling from the factories at Goldiam. He has...

12 july 2021

L'ÉCOLE Van Cleef & Arpels: our mission is to share the jewelry culture with as many people as possible

France has gradually begun to lift quarantine restrictions on places of cultural recreation, including museums starting from May 19, 2021. The world-renowned L'ÉCOLE, School of Jewelry Arts (L'ECOLE des Arts Joailliers) Van Cleef & Arpels...

05 july 2021

Toward a fair and sustainable diamond supply pipeline

14 june 2021

By Ya’akov Almor

According to reports coming out of the American wholesale and retail market, goods have been flying off the shelves in recent months. The reports were corroborated by Bain & Co., which in May updated its earlier predictions about the diamond and diamond jewelry market recovery with a much more optimistic scenario: the market is already swinging back into full recovery, meaning that we don’t need to wait until 2022 for our industry to recover to pre-2019 levels!

While there is a surge in polished sales, especially of larger sizes, many retailers - small and large – still seem hesitant to put out substantial cash to purchase diamonds and replenish their stocks. Requests for memo goods are on the rise. Frankly, this again puts manufacturers, importers, and wholesalers in a bind. Once again, just like before the arrival of the “Next Normal,” the midstream is left holding the bag.

What does this mean?

Manufacturers who buy rough - no matter if they are sightholders, core clients of sorts, or ‘winners’ of tenders and auctions - are required to pay cash on delivery.

During the Covid-19 pandemic, global rough diamond mining and production slowed down significantly and caused the rough market to contract. Consequently, rough diamond prices are rising, as there is less rough to go around and demand for polished is rising. Hence, the increasing demand for polished in the US and China is pushing polished prices up.

All good, you would say, right? Things are looking up, and the market is normalizing again.

To the innocent onlooker, it indeed may seem so. But when we take a closer look, we can see the significant internal changes in the diamond supply chain. These changes have made the position of diamond manufacturers more precarious. Here’s why:

1. The rough market continues to operate on a ‘cash only’ basis;

2. During the past years, one bank after another has exited the diamond industry. The lack of financing options has become an obstacle to many manufacturers’ potential for growth and expansion.

3. Manufacturers, traders, and wholesalers are expected to continue carrying on as they did before and ease their suppliers’ and clients’ cash flow, i.e., by paying cash for rough and giving goods on memo, and offering special credit terms.

In today’s Next Normal, these business models are no longer sustainable! Here’s why:

1. The rough suppliers must come around and take the responsibility they have been professing to, especially during the pandemic. They need to put their money where their mouth is and offer manufacturers appropriate payment terms for the rough they buy.

2. Analysts have been raving about the industry’s debt reduction and the manufacturers’ and traders’ ability to ‘self-finance. But, while the compliments are appreciated, as a result, the financial risk levels of individual companies have risen to unprecedented heights.

But none of the other players in the supply pipeline have agreed to share in the risk-taking.

This needs to change.

3. In this “Next Normal,” not only the rough producers need to step up to the plate, but also the retail sector. Memo goods should be a thing of the past soon. Instead, solid buyer-supplier relationships built on trust, intimate knowledge about each other’s business health and models, and agreements on payment structures will yield the same if not better results. Buyers will be diligent in the specifications of their needs, and sellers will do everything to reduce their risks and deliver highly customized orders to their customers.

In Israel, almost all the restrictions imposed on public life were lifted.

In Europe, where the pace of vaccination has been much slower, life is also returning. Belgium is still not out of the woods, but there, too, things are improving quickly.

In the USA, President Biden has more than made good on his promise to get more than 100 million Americans vaccinated by June 1. As a result, restrictions are slowly being lifted. Retail sales, especially luxury retail sales, are rising as consumers are “revenge spending” cash they have not used for travel and other leisure activities.

Only recently, India - the world’s leading diamond manufacturing nation – was dealt another tragic blow by the pandemic. In Gujerat, diamond manufacturing is still severely disrupted. Unprecedented numbers of diamond polishers lost their jobs, and prospects of them returning to work are slim. In general, India’s retail markets are in the doldrums.

In this Next Normal, the pandemic is here to stay, in one form or another. This requires a new mindset.

One thing has become crystal clear: we’re all in this together. That means we need to take responsibility for the health of our supply pipeline together in a fair and sustainable manner.