As the final days of 2018 pass by, the year has been somewhat of a roller-coaster ride. But then, what’s new about that, some might say.
Geopolitical events certainly provided the background to an uncertain year. An escalating trade war between the United States and China – as well somewhat incomprehensible tariff impositions on solid US allies such as Canada, the EU and South Korea – made for global fears for the state of trade before the trade conflict was taken down a notch or two later in the year.
In February, came the start of the damaging impact of the more than $2 billion fraud allegedly perpetrated by Nirav Modi and Mehul Choksi. The Indian industry is still feeling the shockwaves, with bank credit hard to come by. Several months later, there was more bad news on the banking side, with ABN AMRO Bank announcing the closure of branches in the US and Dubai.
In April, there was the launch of the Bharat Diamond Week, which was repeated again in October. The Bharat Diamond Bourse plans to hold the event twice a year going forward.
Two of the stand-out issues of the year were the announcement by De Beers that it will start producing a line of jewelry set with lab-grown diamonds (LGD), and the US Federal Trade Commission revised Guide to Jewelry produced.
The announcement by De Beers regarding its Lightbox jewelry created shockwaves. People had different views of De Beers’ move: some said that that it was cynically using its knowledge of laboratory-grown stones to create a new market and was not committed to the diamond market. Meanwhile, others were delighted with the step, seeing it as a way of hitting the LGD makers and forcing prices down to a level that would not be commercially viable and thus remove the synthetic threat hanging over the diamond trade.
With a price of $800 per carat, De Beers was seen to be telling consumers that this is what lab-grown diamonds are worth. They are for light and playful jewelry items. Laboratory-grown diamonds can be made relatively easily and cheaply, and thus have little if any inherent value, was the message. Therefore, laboratory-grown diamond manufacturers will to face an uphill task in showing consumers why they should be paying thousands of dollars for their stones when buyers see the price of such diamonds made by De Beers no less.
Regarding the FTC’s Guide to Jewelry, the diamond industry quickly went on the offensive, saying the FTC had moved too far in favor of the LGD makers. The disappointment was even deeper in light of the fact that a year earlier Diamond Terminology Guidelines had been agreed and implemented by the WFDB, the International Diamond Council, the International Diamond Manufacturers Association and CIBJO and is an ISO Standard.
Many felt it gave the manufacturers of LGDs too much leeway in the way they could describe their products. Together with existing concerns about the unflattering way they present the diamond industry: child labor, environmental destruction and so on, industry figures felt this was a step too far.
With articles published on a regular basis, suggesting that LGD jewelry is becoming increasingly popular with the price conscious and socially aware younger generations, the FTC Guide set off industry alarm bells and all the main trade organizations – the WFDB, IDMA, CIBJO, DPA, US Jewelry Council, AWDC, GJEPC, IDI and the WDC came together to oppose it and produce a list of guidelines that they said can be globally accepted.