The move comes after the company requested a vote by members of the RapNet trading network. According to the company, of the 4,544 votes cast, 71.9 percent were in favor of postponing the next issue of the price list to May 1, while 28.1 percent supported continuing to publish on a weekly basis.
“Many have expressed outrage about the reduction of prices in our March 20 price list,” wrote the group’s head, Martin Rapaport. “Others have asked that we suspend publishing the price list. While we reject the idea that prices have not declined and requests that we recall the March 20 price list, we are receptive to calls for a short-term suspension of the price list.”
REDUCTION IN LISTED PRICES SPARKS INDUSTRY OUTCRY
The list published on March 20 RapNet, listed prices dropped precipitously between 5 percent and 9 percent across most diamond categories. Rapaport said the this reflected changes in the diamond market in the wake of the coronavirus pandemic.
“It is vital that the Rapaport Price List reflects the realities of the market even when such realities are not pleasant or welcome,” he stated. “We cannot protect the market from price changes and must maintain the credibility of our price information.”
“Buyers require and expect Rapaport to reflect the lower price realities of the market. We cannot misrepresent prices for the benefit of sellers, and we must not mislead buyers.
While many in the diamond trade wish to maintain inventory values, this is not possible in the current environment,” he stated.
“It is vital that the Rapaport Price List reflects the realities of the market even when such realities are not pleasant or welcome,” said Martin Rapaport, founder and publisher of Rapnet’s price list .
But reaction from the industry was furious. An Instagram account, @stock_off_rapnet, was created to to encourage companies to withdraw their goods from the RapNet trading platform, and within just a short period of time it attracted more than 2,000 followers, and features the logos of hundreds of companies who said that they had removed stock from trading network.
Rapaport did not say that the decision to suspend publication of the price list came as a result of the member opposition, but rather that it was “an extraordinary step we are taking as an act of solidarity with the trade.”
PERRENIALLY CONTROVERSIAL BUT WIDELY USED
While widely used in the trade Rapaport’s price list has been controversial since it was established in 1978.
In December 1981, “counselors for unnamed diamond dealers” petitioned the U.S. Federal Trade Commission to investigate Rapaport’s company, claiming it was “artificially fixing prices in the diamond industry by disseminating an unsubstantiated price report.” The FTC launched an investigation and found no evidence of any conspiracy to manipulate diamond prices, ending its inquiry in June 1982.
Rapaport has always been deliberately vague about the methodology for collecting pricing data, and has also brushed off criticism that the actual prices listed are rarely match those recorded in actual transactions.
Indeed, the company itself has pointed out that the list price is unlikely to be the actual sales price. It states that the list includes “high cash asking prices,” which it notes “may be substantially higher than actual transaction prices.”
Nonetheless, the price list is a relatively accurate yardstick of price movement, and for that reason it has been generally accepted and referred to by the industry worldwide.