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THE DIAMOND INDUSTRY

AS COVID-19 CONTINUES TO IMPACT IN DIAMOND CENTERS, INDUSTRY LEADER CALLS ON GOVERNMENTS TO PROVIDE SUPPORT

The diamond industry continues to be impacted by the ongoing coronavirus, particularly in India, which now is the country with third highest number of confirmed infections worldwide, and in Israel, which is struggling with the second wave of COVID infections after successfully getting through the first wave with relatively few casualties.

In the Indian manufacturing centers of Varachha and Surat, Diamond trading markets, factories and safe vaults have been ordered shut, at least until July 19, with more than 600 diamond workers testing positive

The Surat Diamond Association issued a public appeal for an industry lockdown to prevent local transmission of coronavirus.

“We had to take this decision as a large number of diamond polishers and traders, especially from Varachha and Katargam zones, tested positive,” said Surat Diamond Association president Babubhai Katheriya, as quoted by the Times of India. “The staff also realised that it would be difficult to maintain social distance while working in the factories. This voluntary lockdown will bring down the cases in Surat. Further decision will be taken after July 19.”

Diamond markets and factories in the Indian cities had resumed operations on June 1 after two months of inactivity, but the municipal corporation shut them down again at the end of June after many diamond polishers tested positive, although offices were allowed to remain open on July 17 from 2:00 PM to 6:00 PM.

ISRAEL EXPERIENCES A SECOND WAVE

Prior to June, Israel was considered a success story in the fight against the coronavirus, shutting down the country and flattening the curve of new infections within about six weeks after the first cases were detected in the country.

But, as the government has since admitted, it reopened it economy too quickly, bringing on a second wave, with more than 1,700 infection a day recorded by July 15. The total death toll remains low, however, at about 370, and the number of serious hospital cases, while rising, is only a little more than 200.

While the Israel Diamond Exchange complex in Ramat Gan remains open, IDE President wrote a letter to Israeli Prime Minister Benjamin Netanyahu warning him that the diamond industry in Israel is serious condition. Polished diamond exports between March and May fell by an estimated 80 percent when compared to the same period a year earlier, and the internal trade was down by about 90 percent.

A diamond cutting plant in Surat. The city government sut down the industry to prevent the spread of COVID-19 infections.

Cumulative damage to the Israeli diamond industry to date is believed to stand at about $600 million.

‘What is important is that now is the time to act, to call on our elected officials to assist our magnificent industry in its hour of need, so that we may emerge even stronger than before,’ wrote Yoram Dvash, President of the Israel Diamond Exchange and Acting President of the World Federation of Diamond Bourses, in an open letter.

OPEN LETTER TO WORLD GOVERNMENTS

In his letter, Dvash said that steps taken by the government to assist other sectors have not been extended to diamond industry workers, and this threatens the viability of one of Israel’s oldest and most important export industries.

 

Writing an open letter on July 15, 2020, in his capacity as Acting President of the World Federation of Diamond Bourses, Dvash noted that the international diamond industry has been particularly hard hit by the pandemic.

“With its main markets spread from Asia to North America, the diamond industry’s shut down followed the path of virus. First China, Hong Kong, Singapore and other markets were in lockdown, then Europe and the Middle East, and finally the United States. Our markets closed one after the other, we ourselves were forced to stay at home and our businesses and our livelihoods suffered. The diamond industry was among the first to be battered by the crisis and will likely be among the last sectors to recover,” Dvash stated.

The current crisis, he added, follows on top of the huge systemic problems that have impacted the industry for the past decade – very low profitability, a large price gap between polished and rough, and a major credit deficiency. 

Dvash called on governments in diamond trading nations around the world to step up to provide real assistance to the diamond industry, and he steps that could be taken to have an immediate impact. These include substantial government guarantees to back loans to the diamond industry, grants to companies and individuals in financial distress, reductions on taxes on imports of rough and polished diamonds should be reduced; streamlined international trade procedures, and marketing support programs. The diamond industry as a preferred industry, not as an industry at risk, HE added.

“Certainly, the right package of government aid will differ from country to country, according to conditions in each location,” Dvash noted in his open letter. “What is important is that now is the time to act, to call on our elected officials to assist our magnificent industry in its hour of need, so that we may emerge even stronger than before.”