Rapaport Magazine

Antwerp Market Report

Selling Respectability

By Marc Goldstein
RAPAPORT... Mumbai wants to grab as much as possible of Antwerp’s leading position in the diamond trade. Why shouldn’t they? Actually, it’s quite an homage to the importance the city has on the global diamond exchange. Tel Aviv, Dubai and other diamond centers are quite eager to pay the same kind of homage to Antwerp.

In addition to its rich history and reputation as the industry’s most important and most efficient diamond trading center, Antwerp also has real assets in place — in the form of people with experience in and knowledge of diamonds — that are unmatched in any other city in the world. But “doing business” in Antwerp continues to be a lot more trouble than it should be because diamantaries still have not worked out their difficulties with police and judicial authorities. It is easy to focus on the negative impact of those difficulties: the adverse publicity from police raids of local diamond offices, the confiscation of diamond inventories by investigators and the tense environment it creates for doing business.

But there is a good side to the difficulties, also. Diamantaires must keep in mind that these unresolved problems with authorities simply mark a transitional phase between old habits and the future of the diamond industry in Antwerp. The eventual resolution of the problems — and they will be resolved — will contribute directly to the development of an unprecedented and undisputable source of added value for the Antwerp diamond center. The reward for resolving this dispute is a big payoff and that payoff is respectability and credibility. In an industry that is always looking for added value, Antwerp’s added value will be that it will be recognized as the most respected, credible and transparent trading center for rough and polished diamonds in the world.

The industry insists that Antwerp diamonds are more transparent today than in any other place in the world, and that transparency is the most important asset underlying its future. Getting through the current problems with Antwerp authorities will be like putting an extra “seal of approval” on the city’s diamond industry operations. Dilip Mehta of Rosy Blue stressed, “What all the major companies need today, be they international jewelry manufacturers or diamond producers, is respectability.”

What’s It Going To Be?

All six members representing the trade group on the board of the Antwerp World Diamond Centre (AWDC), as of the June elections, are Indians. That has led to criticism that voting was done strictly along ethnic lines and to arguments that Antwerp needs a global perspective. Kaushik Mehta, AWDC’s re-elected vice president, noted that the newly elected “representatives of the bourses and the AWDC president are nonIndians, which provides the global perspective.”

The current controversy stems from the fact that the Antwerp Indian Association (AIA), which describes itself as “promoting cultural/social relations between the people of Indian origin and other nationalities in Belgium,” circulated a list of the six Indian candidates to Indian members of the AWDC, “encouraging” them to vote for those candidates. Although the Indians said they were not being pressured to vote along ethnic lines, Antwerp diamantaires asked why AIA, a purely ethnic, rather than a business, organization, was involving itself in an industry election.

AWDC is the successor organization to the Diamond High Council (HRD) and serves as the trade group for the diamond industry in Antwerp. Three years ago, there were no Indians on the HRD governing board. In 2006, Indians were elected to five of the six AWDC positions.

The concern being expressed among Antwerp diamantaires is that votes cast strictly along ethnic lines fail to consider which candidates would do the most to promote Antwerp in the global market.

Complicating the matter is the fact that a division is developing within the Indian diamond community in Antwerp. Some Indian diamantaires have complained that some Indian candidates exploited the “ethnic connection and sensitivity” in getting other Indians to vote for them and, once elected, used their elected positions to promote their own company interests rather than the Antwerp diamond industry at large.

Shashin Choksi of the Indo Belgian Diamantaire Association (IBDA) explained that “The Indian community feels that one group has a real objective to help develop Antwerp and make it easier to do business here, whereas the other group only seeks election to use the position to promote their own business internationally.”

The Antwerp diamond industry has a long multicultural history and tradition, with all groups committed to promoting Antwerp as a global diamond center. It is feared that any division within AWDC along cultural or ethnic lines would interfere with that focus.

With another election scheduled for June 2010, AWDC members — Indians and nonIndians alike — have suggested that the dispute is best resolved by watching closely the behavior of all board members during the next two years and then voting them out in the next election if they don’t appear to be representing the best interests of the city and the Antwerp diamond industry as a whole.

The Marketplace

• Everything is selling well in nice makes in D-I, clean to VS2, from 5 points to 2 carats. Prices went up between 3 and 5 percent in July from previous month.
• Generally speaking, something of a
slowdown is occurring in the 3-caraters+ range across the board. However, prices haven’t gone down. Reason could be that even though demand is a little weaker, people know that rough prices are increasing so buyers are delaying purchases until they have a real request.

Article from the Rapaport Magazine - August 2008. To subscribe click here.

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