Against the ongoing uncertainty about the state of global economy, what should be the actions of members of the diamond industry? Here is the opinion of Mr. Kaushik Mehta, Chairman of Eurostar Diamond Traders and Vice President of the Antwerp World Diamond Centre (AWDC), expressed in his article pulished by Antwerp Facets.
"We have seen rising demand and prices for rough and polished diamonds in recent months. However, we should not be rushing to take this sign as evidence that the recession is over and that we can now relax our guard. I believe that vigilance must remain our most important priority. Rough prices have now run too far away from polished prices and I am afraid that another bubble situation will ensue. It is in everyone’s best interests to prevent this from recurring", Mehta stressed.
On his opinion, it is becoming clear that economic recovery will be very gradual and this is why a cautious approach is the safest approach: "Our preparation for industry-wide recovery must be today, regardless of when the next harvest will be".
"The question everyone has been asking themselves since the crisis began is: what should we do? I believe there are several steps we should all be taking. Firstly, we should keep a cool head and not take rash decisions. A sense of proportion is vital: there have been crises in the past and there will be others in the future. Although they are painful, they are also a natural element of the business cycle and can be seen in a positive light and thus regarded as opportunities. When we are running too fast, we need to slow down to catch our breath. View this crisis as an opportunity to make what you already have even stronger and you will emerge as a winner", Mehta said.
He thinks that diamantaires should not jump at the opportunity of buying goods nor should we speculate: "We don't need, and must take all steps to avoid, creating another spiral of price rises of the type we saw up to mid-2008".
Mehta advises that the diamond business must seek to deal with memo goods and long-term credit deals and create globally compelling consumer diamond promotion programmes to reinforce the long-term emotional value of diamonds.
Alex Shishlo, Editor of the Rough&Polished European Bureau in Brussels
