The largest buyers of diamonds are not at all world-renowned jewelry companies, but watch manufacturers from Switzerland, according to Jean-Baptiste Mayer, an independent gems trader.
However, he said that small traders of polished stones run into difficulties trying to enter this market due to stiff competition. You have to possess a large stock of high-quality diamonds to be among the suppliers of the Swiss watch industry, as well as to have a permanent network of buyers and sellers, Mayer said.
Therefore, independent traders in Switzerland today need to be mobile as they acquire and sell diamonds mostly abroad. If previously customers used to come to Geneva, now the situation has changed dramatically.
Nevertheless, the city of Calvin is retaining its position of a transit point on the map of the world diamond market despite the growing international competition. Diamond trading in Geneva is remarkable for its high quality goods, safety and impeccable banking services.
However, Geneva has lost some of its appeal as a center of the global diamond trade, whose business reached its peak in the period between the late 1970s and the late 1980s. Today, on the backdrop of the emerging Asian market the role of Geneva has become less prominent, although the reputation of local diamond dealers remains high.
Market players here are a few, but they all know each other and the business environment is very comfortable. In contrast, the competition in Antwerp, New York, Mumbai and Tel Aviv is much tougher and the atmosphere is less friendly.
Although Antwerp remains the world’s major diamond trading hub from the 2000s, India accounts for 80% of diamond production, having bridged its manufacturing network with the commercial infrastructure of Antwerp. As a result, India cuts 12 out of 13 rough diamonds sold in Antwerp, according to Bilan, a Swiss-based web portal specialized in covering business.
If formerly the Indians focused mainly on cutting and polishing small-size diamonds, this situation has changed over the past decade. Now the Antwerp market is dominated by Dilip Mehta, who came to the city on the Scheldt in the 1970s.
"In terms of trade volume, Antwerp still takes a dominant position in the market, but in the long run it is India, which will take hold of this market," says Jack Dändliker, a gems trader from Zurich.
Consumer demand from Indian and Chinese buyers has significantly increased world prices for diamonds in 2009-2011, particularly for gold jewelry with diamonds.
The diamond price index developed by IDEX Online went up by 34% in the past ten years. Prices peaked in 2011 and then remained stable over the past two years due to a slowdown in demand from China.
According to Jean-Baptiste Mayer, the evolution of the diamond market today is driven by ultra-wealthy investors and collectors. In purely social terms, wearing diamonds is becoming increasingly rare. Customers prefer cheaper and more spectacular rings and women more and more rarely want to show their diamonds, which is a consequence of prejudice arising from the economic crisis.
Jean-Baptiste Mayer’s advice to collectors among multimillionaires is to acquire perfectly clear diamonds from the Golconda mine in India, whose share in the market is only 0.2%. Other rarities also include colored diamonds - green, orange, blue or pink. These are the stones usually bought regardless of their value and they break price records at auctions, the expert says.
Alex Shishlo, Editor in Chief of the European Bureau, Rough&Polished
