August is more than half way through. Vacationers are returning home from their summer time off, diamond traders in Belgium and Israel are back in their offices and Indian manufacturers are fulfilling their orders from the India International Jewellery Show in Mumbai. Most everyone is already thinking about the November-December Holiday season and the large sales it is hoped it will bring. However, this seemingly idyllic description does not disclose the concerns and doubts that the hearts of many in the industry are harboring. The worries that the upcoming holiday season, that annual retail pilgrimage for which everyone works for so hard throughout the year, will not see an outpouring of spending that everyone in the diamond pipeline wants so much.
Belgian and Israeli traders are back in their diamond exchanges, but in a low mood. They are still uncertain about the direction polished prices will take. After weeks of continuously slumping, prices have started to increase in the past few days, although that is mainly a response to the resumption of trade.
In India, diamond traders arrived at IIJS with very low expectations. As a result, they were not fully disappointed. There were some orders but overall, demand was much lower than that seen in past years, and this is anything but encouraging.
The Indian market is also concerned about the country’s economic situation, a year before the general elections. With high unemployment, deep government corruption, a weakening rupee that could be heading towards an exchange rate of 65 rupees to the US dollar and worries over the value of their diamond inventory, they have much on their minds.
Rough diamond prices are uneconomically high, so much so that banks that provide financing to diamond firms are hesitant about fully supporting De Beers Sight purchases, scheduled to start next week. This is a vote of no confidence in De Beers’ pricing policy.
In Japan, after a long run of rising polished diamond imports, imports are now starting to decline, and with it, the average value of imported goods is also declining.
In the US, retail demand for jewelry is rising, and is in fact larger than we first imagined. The problem is that the increase is for jewelry as a general category, while demand for diamond jewelry as a sub-segment is apparently not up at the same rate.
Is this a world turning upside down, the beginning of the end of the diamond industry as we know it? Not really. We have at least one thing to thank for the diamond industry’s continued existence – desire. A desire for ornamentation, a desire to show off that we are doing well, a desire to spend, and the most important desire – the desire for each other. The Desire.
As long as this desire exists, as long as a man wants to thank a woman, show his appreciation of her, try impressing her or apologizing to her, there will always be demand for diamond jewelry. Men and our silly doings will make sure that diamonds will be forever.