The Antwerp diamond trade is in the doldrums. A collapse is even mooted according to daily Gazet van Antwerpen. Antwerp's imports of rough diamonds have fallen 38 per cent this year. ‘These are dramatic figures,’ says diamond expert Koen Vandenbempt (Antwerp University). ‘These are choppy times for the diamond sector worldwide.’
In the first nine months of this year, the sector witnessed an historic low importing $3.4 billions’ worth of rough diamonds. That's 38 per cent less than in the same period last year. If you look at the last decade, imports of rough diamonds actually fell by 70 per cent.
‘These are devastating figures’, says Koen Vandenbempt. He is professor of Business Studies and Economics at Antwerp University and chair of the Diamond High Council. ‘The entire sector is experiencing a perfect storm, also in Antwerp’ he notes.
Major blows
Koen Vandenbempt points to the boycott of Russian diamonds by the G7, the world’s 7 richest, western industrialised countries, and the European Union. In addition, the sector faces new competition due to the rise of synthetic diamonds.
‘Nowadays it is much cheaper to produce diamonds in a laboratory. Synthetic diamonds are very popular in the US and that's a problem for Antwerp because most of our rough diamonds are exported to the US. Demand is now dropping.’
‘Also in China, our second largest market, demand is falling because the country is not doing so well economically. Less money is being spent on jewellery. As a result of all these factors combined, the sector is taking a big hit.’
Demise?
Will this lead to the eventual demise of the Antwerp diamond sector? In Antwerp, there are no longer that many production jobs anyway, Vandenbempt explains. ‘Diamond polishing mainly takes place in India. Antwerp acts mainly as a diamond trading centre, and that future does not look bright.’
Still, Vandenbempt is not losing all hope. ‘When the G7 countries introduced sanctions against Russia, Antwerp was actually the only major importer of rough diamonds affected. The other major hub, Dubai, is not covered by the boycott, nor does it care. So there, but also elsewhere, many Russian diamonds still circulate.’
‘Because of the sanctions Antwerp had to take steps to become more transparent. Every imported diamond requires a certificate of origin. That traceability is a big advantage in a sector that has a bad reputation.’
‘It’s clear the sector is shrinking, but I hope and expect that big jewellery brands will demand clear information on the origin of a diamond and embrace transparency. If the situation evolves like this, I can see a revival in the trade of rough diamonds in Belgium in the short term.’
‘The diamond sector has a bad name, but rough diamonds are actually a very nice product,’ Vandenbempt adds. ‘The problem is that the sector has been involved in so many shady practices that its reputation is hard to reverse.’
‘But you can also turn it into positive story, like in Botswana, where diamonds are a very important source of income for the country. In addition, synthetic diamonds are not as ethical and green as claimed. Their production is hugely polluting.’