Free diamond trade to boost consumer demand

DUBAI – Free diamond trading would spur consumers to consider the precious stones as financial security, much like gold, diamond entrepreneur Martin Rapaport said yesterday.

Rapaport, whose network of international firms bid to develop a competitive trade in the global diamond market, said the industry has been dominated by a few players who manipulate prices by controlling production.’We really have to walk away from the old way of doing business and start being transparent to consumers on how much the diamonds are really worth,’ the Chief Executive of The Rapaport Group told Reuters.’We have to start being in the business of trading diamonds and not holding them back.’The group, which holds periodic auctions in wholesale polished diamonds online including one later this month, plans to market free diamond trading in the Middle East.’We are blowing up the market here and really getting on the nerves on all those big retailers in the Middle East who want to control prices,’ said Rapaport. The company’s online trading site, RapNet, has an average daily listing of diamonds worth more than US$4 billion, with 4 100 trading members from 80 countries, according to company data. It plans to launch an Arab trading website within weeks and will open up a base office in Dubai, said Rapaport. ‘We have to asking our selves: ‘Why did the price of gold go up during the crisis and not diamonds?’ It’s because consumers have no confidence in diamonds,’ he said, adding that diamond profits should be made from the value added to the stones. ‘Consumers’ needs are different so like food there should be a McDonalds for diamonds and a Four Seasons fancy restaurant for diamonds.’ Sales of diamond jewellery have fallen sharply in the United States to 2,5 billion carats this year from 80 billion carats in 2000, said Rapaport.’This means that we have to allow the diamonds on the fingers of those little old ladies in Florida to compete with the diamonds coming straight from the mines,’ he said.’The larger the resale market the more confidence you create that diamonds will always hold value.’The global economic crisis has slashed disposable incomes, curbing luxury spending. ‘So right now the new luxury is security and that’s how we should market diamonds these days, as a financial and emotional security,’ he said. ‘The bottom line is in order to achieve that we must be as transparent as the diamonds we sell.’- Nampa-Reuters