While the $80 billion spent on diamond jewellery last year was a record, diamond manufacturers are expected to share a profit of just $100 million in this year. This decrease comes at a time when manufacturers are finding themselves in an increasingly difficult situation, stuck between mining companies charging high prices for rough stones and retail chains demanding gems at low margins to keep sales moving.
“The rule of supply and demand doesn’t necessary apply to the diamond sector,” says Yoram Dvash, a high-end polisher in Israel. “Manufacturing is not just work, it’s out of love—taking the rough stones, with all their odd shapes, and bringing out the most precious thing in the world. But this love costs a lot of money. And rough prices have been going up and up with no connection to demand.”
Other businesses that make up the global diamond trade have also seen a recent decrease in profits. Overall, this has been due to the industry’s difficulty in sustaining consumer demand at a time when people are more likely to spend disposable income on technology than diamonds.
“Have you ever heard of a 20-year-old standing outside a store all night to buy jewellery?” Ernest Blom, president of the World Federation of Diamond Bourses, asked delegates at an industry conference. “I haven’t,” he answered. “We have fallen behind the times.” CJ