As we celebrate the Jewish New Year, we traditionally look back on the events of the past year. We try to learn from them and to take action that will create a better outcome in the new year.
The past year has been especially challenging for the world diamond industry. There are a few factors responsible for this. There has been a serious decline in demand in our major markets – the United States and China. Economic uncertainty has cut spending for diamond jewelry in the US, and China has not rebounded from the Covid 19 lockdowns at the level we had hoped. Prices of polished diamonds declined dramatically.
What’s more, until recently diamond producers did not reduce supply in line with the lower demand, creating oversupply and further lowering prices. Lastly, the popularity of LGDs, especially for bridal jewelry in the US, caused a decline in demand for natural polished diamonds. This despite the fact that LGD prices are declining rapidly and they are not providing lasting value to consumers.
De Beers has recognized the harm that LGDs are doing to the natural diamond industry, in which they are major stakeholders. Therefore, they have decided to discontinue offering Lightbox for engagement rings and will promote this brand for fashion jewelry only.
More importantly De Beers has decided to return to generic marketing of natural diamonds by investing $20 million in marketing programs during the upcoming holiday season in the US and China. We commend De Beers for this decision. However, it is not enough.
I believe that we need to come together and to launch an industry wide effort to support natural diamond demand. At the World Diamond Congress in March, the WFDB expressed its full support for the Natural Diamond Council and pledged to engage in joint marketing efforts. Now, the WFDB is taking a further step to support natural diamonds. We are leading a major initiative to bring together key players in the international diamond and jewelry industries, to discuss practical steps to boost demand for natural diamond jewelry. We will provide further information on this initiative soon. I call on all of you to join us in this effort.
On another note, we are all anticipating various limitations that the G7 countries intend to impose on the trade in rough and polished diamonds. The WFDB is now working closely with the World Diamond Council and other bodies to put forward a system of industry self-regulation that would support the objectives of the G7, while limiting disruption to the industry. We are very optimistic that this will be seriously considered by the G7 before additional limitations are announced.
I wish us all an excellent year, professionally and personally, from now and into 2024, filled with good health, happiness, peace and prosperity.