| Diamond trade is growing, Russia's participation in it is declining De Beers Corporation reported sales of $5,670 million in 2000, up 8% from the previous year and significantly higher than the disastrous 1998 ($3,345 million). The corporation attributes its success to the growth of retail sales around the world, excluding Japan. Traditionally, not a word is said about Russia: the jewelry trade here is completely insignificant and does not make a difference on the world market. It seems that we are gradually influencing the global diamond business less and less.
In accordance with the current trade agreement between ALROSA and De Beers (its term will end on December 31, 2001), Russia must annually sell the corporation diamonds worth at least $550 million (annual production is about $1.5 billion), but not more than 25 % of De Beers sales volumes. Therefore, just a few years ago, an increase in sales on the world market was perceived in Russia with great satisfaction: this gave confidence in a consistently high level of exports. But now manufacturers are much more indifferent to this fact. As a source in ALROSA told a correspondent of the Vremya Novostey newspaper, the company sells the corporation the bare minimum of diamonds, that is, in the amount of approximately $550 million specified in the agreement. The rest goes to the domestic market to its own Russian cutters, since according to the law they have the “right of first night,” and De Beers receives what is not in demand in Russia.
Russian diamond miners are unable to make strategic plans because they do not know what their relationship with De Beers will be like after the current trade agreement expires. It seems that the development of events does not really depend on them. Gokhran periodically speaks very critically about the possibility of further cooperation. The lobbying activities of Israeli cutters give rise to rumors that the flow of Yakut diamonds may be redirected towards Israel. This country, which does not have its own raw material base, has a powerful cutting industry, the growth of which is limited only by the lack of diamonds.
Any earner, in theory, doesn’t care who he sells his goods to, “as long as the person is good” and pays regularly. However, experts speak with some concern about the possibility of concluding long-term contracts with Israeli cutting. The fact is that the interests of cutters and the interests of diamond miners are very different. The former are interested in reducing prices for raw materials, the latter, on the contrary, want to not only maintain them, but also constantly increase them. This rule is the cornerstone of the global diamond market; it ensures the investment attractiveness of rough and polished diamonds, viewing them as something capable of preserving and increasing the money invested in them. De Beers is a miner that religiously adheres to the principle of the eternal value of diamonds, so trade relations with it are built on a basis that is completely understandable to other miners. Even by lowering prices, he will not “kill” the commodity market. But regarding cutters, experts have no such confidence. Anastasia NARYSHKINA |
|
