Why Diamonds Are Israel's New Best Friend

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Aug. 26 (Bloomberg) –- Bloomberg's Elliott Gotkine talks the business of diamonds and diamond pricing with Rapaport Group Chairman Martin Rapaport on Bloomberg Television's "Countdown." (Source: Bloomberg)

Aviv and elliott gotkine.

Thanks.

A few names in the world synonymous with diamonds, debeers and the like.

There is only one name that really comes in, and that is one that basically sets diamond prices around the world.

The chairman is martin rapoport, and i am pleased to say he joins us this morning.

Good morning.

We have got and worked as the major distribution center in europe.

Where does israel fit in, given that much of the manufacturing has gone abroad?

Diamond manufacturing is very important, but it is not very important anymore because the suppliers are squeezing prices, and there is manipulation going on.

How'd you get the right diamond to the the right person at the right time at the right rice?

That is what israel does.

There is the real money of moving them onward to consumers.

Retailers make a good margin, but what they really need is a trading center.

Bringing all of these buyers and sellers from around the world, it is creating that trading market.

Doing really well with the polishing industry, being number one in diamond polishing.

It is a big thing, but india is in big trouble.

Their domestic market has been shattered by the fact that their currency has dropped precipitously, so the local price in india, because they are dollar-denominated, it has gone up significantly, reducing demand in india, and you have got the government, doing some very very, how should i say, stupid things, and they have got the diamonds, which means india is no longer and cannot be the world's diamond trading center, so the move to the trading center is contrary, but the big problem is the bubble.

The indian government has been off the rising loans for diamond manufacturing, to chas caused the price to be higher than normal.

This is reducing the profits.

With rough diamonds, the ones you get out of the mine, they are more expensive?

In many cases, if you take that rough diamond, you cannot make much money or even any money off of the bat, so what you have got is six companies controlling 93% of the rough diamonds, and then you have only got dealers trying to hold the bag goods in the market, creating an artificial situation.

Having a look about your net worth, down.

What is driving this?

The china economic slowdown, for example, reducing demand?

What is going on there?

There are a lot of different qualities.

Quality diamonds.

China was a huge force in 2000 11. they were buying tremendous amount of diamonds as they had an expanding middle class.

China is still important, but their growth has abated.

The name in the game in diamond pricing is what is coming in?

What forces are in the market?

Because the indian rupee has been decimated, everything has fallen back on the united states market, and therefore, prices came up very strong.

We're talking about 100 million consumers per per year moving from india and china, and, of course, we see these booms and busts cycles.

About the future, people in the industry are talking about synthetic diamonds, taking carbon atoms and creating a diamond in the lab.

How significant is that to be for the significant diamond dealers and traders right now?

Can you detect that the diamond is synthetic, and today, you can detect synthetics.

Disclosure.

Are they disclosing this am because we are an authentic business, saying this is an authentic diamond?

You do not want to mix these two up, and the industry is concerned about this idea of mixing diamonds, particularly smaller, lower quality diamonds, which are hard to detect, but overall, there is the key factor making the diamond market work, and another idea is that it is not bad to have synthetic diamonds out there.

There is a demand for many more new consumers preview by the synthetic.

And you say, i remember i was in shanghai, and they were buying us were borski -- synthetic diamonds, and they said when they got the money, they would buy real diamonds.

Thanks very much for joining us.

This text has been automatically generated. It may not be 100% accurate.

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