Israeli Rough Diamond Trade Declining

Since the start of the year, Israeli imports and exports of rough diamonds have declined significantly. Net rough imports in March fell 31 percent in value to $331.48 million and 33.7 percent in volume to 1.224 million carats to an average of $271 per carat.

Israel has been struggling in the past three years to preserve its rough diamond supplies, seeking direct supply from Russia and Africa. De Beers’ Diamond Trading Company (DTC) was a major source of rough diamonds to the Israeli market through Israeli Sightholders, however many of them lost their Sightholder status, and with it the center lost a big share of its supply from the DTC.

During the first three months of 2006, Israel imported $1.114 billion worth of rough diamonds, a 15 percent decrease compared to 2005. In terms of weight, the center imported 4.055 million carats to an average value of $274.7 per carat.

Rough diamond exports from Israel have also declined, though not as dramatically as imports. In March the center exported 2.17 million carats worth $262 million, an average of $121 per carat. During the January – March period 5.782 million carats were imported, valued $769.75 million, averaging $133 per carat.

The difference in average per carat value between imports and exports underscores the Israeli market’s tendency to manufacture the bigger, pricier goods in the country and the cheaper goods in China where the cost of labor is lower.

It is interesting to note that by volume, rough diamond exports exceed imports. Since Israel has no diamond mining, Israelis are shipping rough diamonds that were perhaps kept in stock.