Although Israel exported a record amount of diamonds in 2003, diamond merchants said today that the year was nonetheless the worst in the industry's history. Diamond exports, including polished diamonds, rose by 5.9% to $5.5 billion.
Diamond merchant Moti Ganz said the cost of labor in countries such as China, India, and Romania was leading to the establishment of diamond polishing factories in those countries, and to a reduction of production in Israel. The shift in production to the new diamond powerhouses has caused hundreds of Israeli diamond cutters to abandon polishing in favor of trading.
Israel Diamond Exchange president Shmuel Schnitzer told "Globes" that 2003 was a difficult year for the industry, with small and medium-sized traders particularly hard hit.
A paramount factor for this situation was the deteriorating trade in rough diamonds, caused by a global shortage and the decision by diamond syndicate de Beers to cut allocations to Israeli merchants. Schnitzer said the answer should be the conversion of Israel into a center for the trade in rough and polished diamonds, which would preserve Israel's global standing and halt the move to other countries.
In order to achieve the goal, Schnitzer recently asked Minister of Industry Trade and Labor Ehud Olmert for help in making the Israel Diamond Exchange in Ramat Gan into a free trade zone. Olmert promised to help diamond merchants obtain more rough diamonds.
Published by Globes [online] - www.globes.co.il - on February 4, 2004