The conference discussed the extent of trade in the industry, the various forms of trade, and also addressed credit problems that are a global challenge that requires solutions.
The DPA, together with WFDB - the World Federation of Diamonds, and the CIBJO 0. - the World Jewelry Federation and a number of other key players in the global diamond industry - have presented an extensive review that analyzes the development of the synthetic stones market in the present and future.
Along with the presentation of the analysis, the organizations reported on significant moves they are leading along with a public relations firm and a leading law firm in Washington vis-à-vis the FTC, in light of a decision in recent weeks to replace synthetic diamonds with "laboratory diamonds" or "man-made diamonds."
As part of their analysis, they referred to the volume of trade in synthetic diamonds and said that today the trade constitutes 5% of the entire market. This is a low percentage, but it also indicates a trend in the global industry. It is important to be precise and add that most of the production of synthetic concentrates on the small stone market as well as its growth, and these stone sizes are less related to the Israeli industry but they pose a certain threat to the Indian market.
According to the future forecast, in the next few years most of the trade and development of the synthetic market will continue to focus on the small stones, with some slippage expected for the medium and large stones market.
A few months ago, De Beers led a strategic move into the synthetic diamond market in order to change the value of the synthetic diamond and sell it at a significantly lower price than the existing synthetic market. At the Federation conference, the impact of the move was discussed and data were presented showing that the move did indeed begin to dilute the medium and small companies operating in the market. The gap between the price of synthetic diamonds in the global market and De Beers is not a marginal gap and can reach tens of percent, so many players have been unable to cope with the low price that De Beers is offering. It appears that this is a successful move, which cleans the market and signals the outward movement of synthetic companies that operate today.
In the past five months prices of synthetic have fallen between 15% -20%. This indicates that the synthetic market is an unsafe market, there is no price to the commodity, and this is an unexpected and dangerous gamble. Therefore many traders prefer the solid, the familiar and the known.
Another challenge discussed at the conference is mixing the goods between synthetic diamonds and natural diamonds. This problem is especially complex because of the difficulty in controlling its development when it appears to be one of the main solutions for the synthetic diamond traders to distribute the goods.
In order to thoroughly examine the issue of the synthetic diamond market, an inter-branch committee headed by Mr. Hezi Bloom, whose members include Inspectors of Diamonds Mr. Danny Tal and other representatives of the Israel Diamond Manufacturers Association, The purpose of the committee is to examine the issue in order to examine how the Israeli industry should deal with the issue.