As Tough Year Ends, Ehud Laniado Looks at Top Issues Heading Into 2016

Finance and Trade
22/12/2015 11:03

As 2015 Comes to an end, diamantaire Ehud Laniado sums up the year and discusses the main issues of relevance for the diamond trade, including transparency, financing, marketing, synthetic stones and pricing. He states that, "Financing and cash flow are among the most important issues we will have to address in the coming year. This goes far beyond transparency. We need to resist the uneven playing field where some companies get financed against projections rather than against real-life business acumen ... Over-capacity of financing is certainly the biggest issue in the manufacturing sector of the diamond pipeline today. It creates an oversupply of polished diamonds from huge factories, leading to constant polished diamond price drops and forcing the midstream to continue to buy unprofitable rough diamonds to feed the vicious cycle."

He also calls upon the midstream part of the market – the manufacturers – to act as "gatekeepers" by only taking "economically rational decisions and refusing high rough prices." Concerning synthetic diamonds, there are three components: the traditional markets for diamond jewelry and market for fine and high-end diamond jewelry will face some competition from lab-grown, though the latter is already differentiated from synthetics. The third market, however, for diamonds that have the potential for wealth perseveration will be bought and treated specifically for that purpose, with a new methodology that is based on the economy of rarity. In this category, lab-grown diamonds do not pose any competition.