The natural disaster that struck Japan, which is often called “the world’s workshop,” has caused economic aftereffects for a number of customer countries. Rough&Polished caught up with some of the diamond industry participants to find out their views on how this might affect their work.
David Davidson, mining and metals analyst, Paradigm Capital:
What is the impact of the tsunami and earthquake that recently hit Japan on the diamond and jewellery industries in the country?
This is certainly going to have ramifications for a couple of years. It will have an impact [on the global diamond market]. The last thing they want to do is rush out and buy a handbag or a diamond ring. They are putting luxury goods at the back of their priority list.
Will China and India be in a position to cover the drop in demand for diamonds in Japan?
Rapid growth in diamond demand elsewhere in Asia would help to offset reduced sales in Japan. China and other parts are picking up the slack pretty quickly but will take a couple of years to overcome this.
De Beers claimed that Japan consumed 11 percent of the global diamond output. What impact will this disaster have on global diamond prices?
The 11 percent figure was of the total carats consumed, and if expressed in dollars, Japan’s market share would be much higher, as consumers there tended to buy bigger, higher value stones. There was not a lot of new production coming into the market, and this would prevent a large oversupply situation.
Julius Zheng, General Manager, Rapaport Shanghai
I think the Japanese earthquake will not have much effect on China diamond market. China does not import a lot of diamonds from Japan. China's diamond market is a young and emerging market, and the domestic demand is stable and increasing.
Wendy Peleman, Marketing Manager, IGC Group:
None of our customers in Japan has suffered, they are all fine. As for how an earthquake can affect consumer demand in Japan, then talk about it now, two weeks after the cataclysm, too early.
Burhan Seber, Managing Director of Hardstone Processing, Namibia:
We don't deal with Japan. But I am sure business will be very quiet for some time due to crisis. In Egypt, business has stopped since the revolution and will probably only start again when situation is stabilized. The same is probably true for Japan, though it will take much longer.
