Diamond industry seeks to regain shine

Despite uptick in exports and imports, pre-crisis level still far away

Despite signs of robust growth of exports and imports of diamonds in the first three months of the year, the industry is still far from where it was before the global financial crisis, according to the Industry, Trade and Labor Ministry.
“We are seeing signs of a recovery in the diamond industry,” Industry, Trade and Labor Minister Binyamin Ben-Eliezer said Thursday at a diamond conference in Ramat Gan. “The most recent data for the first quarter of the year point to an increase of 55 percent in polished-diamond exports. But we are still far away from the peak days seen before the outbreak of the global financial crisis.
“Still, the trend in recent months shows that the Israeli economy is on the right track to recovery. Economic data point to improvement in economic growth, industrial production and employment, and I am confident that the trend will continue to strengthen.”
In the first quarter of 2010, Israeli exports of polished diamonds rose 55% to $1.45 billion from $936 million during the corresponding quarter last year. Polished-diamond imports increased by 105% in the first quarter of the year to $835m. from $407m. in the first three months of 2009.
Exports of rough diamonds jumped 164% to $832m. in the first quarter of 2010 from $315m. in the same quarter last year. Imports of rough diamonds generated $917m. in the first three months of the year, up 234% from the $274m. during the first quarter of 2009.
Despite the large rise in exports and imports of diamonds, when comparing 2010 to 2008, there is an average fall of 27%.
Even if the recovery trend continues, the diamond industry was still far away from its peak activity in 2007 and the first three quarters of 2008, Shmuel Mordechai, diamond supervisor at the Industry, Trade and Labor Ministry, said at the conference.
Ben-Eliezer said: “2009 was a difficult year for the Israeli economy in general and the diamond industry in particular. Despite the positive signs in recent months, we still need to be cautious and watch the changes in the global economy and their impact on the Israeli economy.
“In the good years, the diamond industry reached highs of $11 billion in annual exports. I believe that over the next two years, the Israeli diamond industry will succeed in returning the sector to its old strength and increase its activity to the levels seen prior to the crisis and beyond.”
He said the ministry would help make it easier to achieve agreements for direct supply of rough diamonds to local industry.
Last month, Ben-Eliezer struck an agreement with Russian diamond-miningmonopoly Alrosa to supply Israel with a direct line of $300m. worth ofrough diamonds, aimed at strengthening the country’s industry as aglobal production and trading center. The accord is expected to enhancethe economic ability of the local diamond industry to polish diamondsand boost Israel’s operations and trading activity worldwide.
In the first quarter of the year, the US was Israel’s leading exportdestination of polished diamonds, accounting for 47% of exports. HongKong was the second-largest destination, at 27%; followed bySwitzerland, at 8%; Belgium, at 7%; the UK, at 2%; and other countriesfor 9%.