With De Beers dropping prices and the Rap promising to be stable we begun the year 2024 on a positive
note thinking the pressure of the year will not be anything like the pressure faced in the year 2023, and
little did we realise that we would be faced with even more pressure. The global economy continues to
experience a range of challenges and disposable income have taken a hit resulting in declined consumer
demand from the record levels seen post the pandemic
In the United States, natural diamond demand is down as lab grown diamonds have made significant inroads in the bridal market. Moreover, a growing number of young couples have chosen alternative stones for their rings or have chosen not to buy engagement rings at all. In China, diamond demand has not sprung back to pre-pandemic levels, for bridal and other jewelry, however we have seen a surge in demand for investment in plain gold and plain gold jewellery.
Since the US and China represent the two major markets for diamonds, these factors have put a significant dent in natural diamond exports and sales worldwide.
The interest in Lab-grown diamonds has also started to creep into the local consumer market with a growing number of consumers requesting Lab-grown diamonds. As the Club in agreement with WFDB we are not against the sales of Lab-grown diamonds, as long as they are properly declared without giving consumers false information. We continue to caution our members and industry at large to thoroughly check any diamonds that they purchase, to ensure that they are all natural, as we have seen a few lab-grown diamonds being fraudulently sold as natural diamonds in the local market.
On February 24, 2023, the G7 Countries (USA, Canada, Germany, France, Italy, UK & Japan – along with the EU) made a statement regarding restrictive measures on Russian Diamonds. On December 6, 2023, similar statements were released by all the G7 nations including the EU.
‘We will introduce import restrictions on non-industrial diamonds, mined,
processed, or produced in Russia, by January 1, 2024, followed by further
phased restrictions on the import of Russian diamonds processed in third
countries targeting March 1, 2024. To further the effectiveness of these
measures, those G7 members who are major importers of rough establish a
robust traceability-based verification and certification mechanism for rough
diamonds within the G7 by September 1, 2024, and we will continue to consult
with partners, including producing and manufacturing countries on its design
and implementation. We will continue consultations among G7 members and
with other partners including producing countries as well as manufacturing
countries for comprehensive controls for diamonds produced and processed in
third countries on measures for traceability.’
The G7 system of enforcing the sanctions against Russian diamonds is still causing dismay and uncertainty throughout the diamond world. The one-node system, in which all rough must be certified by the Diamond Office in Antwerp, has been in effect since March1 for all rough diamonds entering the EU, and is supposed to be implemented for all rough entering the G7 countries on September 1, 2024.
The WFDB, together with the WDC, GJEPC and IDMA, issued industry call to action asking the G7 governments to hear industry concerns over their Russian diamond sanctions system, there has been no official communication from them regarding this, but there are indications that the proposal has been well received.
An additional development is the recent appointment by De Beers of a former senior British diplomat, Emma Wade-Smith, the UK’s consul general in New York until January, to lobby G7 governments to change the sanctions implementation plan. De Beers is arguing that the requirement to send diamonds only to Antwerp will create high costs and threaten the revenues of African producer countries.
An additional development is the recent appointment by De Beers of a former senior British diplomat, Emma Wade-Smith, the UK’s consul general in New York until January, to lobby G7 governments to change the sanctions implementation plan. De Beers is arguing that the requirement to send diamonds only to Antwerp will create high costs and threaten the revenues of African producer countries.
This calls for us as industry bodies and all relevant stakeholders to come together and work together. The diamond industry is at its best when it unites, especially when the leaders among diamond community come together to shape the future.
The diamond Industry has a grand past and diamantaires are proud that they do business in the same way for hundreds of years, with a handshake and a mazal. Today a lot of changes have taken place. Conditions have changed, the business climate has changed, the consumer has changed, and the competition has also changed. We must be aware of the changes and we must take steps to adapt. If we as the diamond industry won’t adapt, the industry will remain behind.
The new consumers [Y&Z Generation] live in the virtual world of social media, but they are also very much down to earth. They care about society and the environment, and they demand social responsibility from products they support. They want to be sure that the diamonds they buy do no harm to society and to the earth; they demand transparency and traceability, and our industry, which has always been closed and secretive, must open itself more and more. We must work with young thinkers to adapt ourselves to the demands of the new consumer.
WORLD FEDERATION OF DIAMOND BOURSES (WFDB)
The Shanghai Diamond Bourse held a President’s meeting in
March 2024, and the Diamond Dealers Club of South Africa was represented by myself in the meeting.
WORLD DIAMOND COUNCIL
In the next 24 days the World Diamond Council will celebrate a 3 year anniversary of the updated Systems of Warranties (SoW). A call is still made to the industry to subscribe to this self-regulatory framework of the new Systems of Warranties, which is endorsed by all the major stakeholders in our industry and aims to further boost transparency, trust, and sustainability in our industry.
CREDITORS
Members are requested to advise the Club immediately of any defaulters,
for the Club to take the necessary steps to warn other members of the
industry. Such steps would include arbitration proceedings, disciplinary
hearings and circulation of such defaulters’ details to all members.
APPRO NOTES
We continue to urge members that recipients of Approval Notes take on absolute liability. It is their personal responsibility. Members should print such a clause on their Approval Notes to remind recipients.
CORPORATE SOCIAL RESPONSIBILITIES
Selling diamonds is becoming less about selling the diamond itself but more about the experience and the good that diamond does for the Producers, the community it was mined from, and everyone in the pipeline that has been involved in bringing it to its brilliance.
INSURANCE JEWELLERS BLOCK
In light of the pressures faced by individual businesses, it has come to our attention that some members are cancelling, or not renewing their insurance policies. It is incumbent on members who take goods on appro from other members that they have insurance.
CONCLUSION
This past year marks a third year for both myself as Chairman and Richard Ramsden as the Vice Chairman of our three-year term, and in this forum today, we will be electing a new Chairman, Vice Chairman and the committee. I would like to thank the outgoing committee and all sub-committees for their hard work and commitment to the organisation and industry at large.
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