PRESS RELEASE, October 5, 2011, New York: Certified polished diamond prices fell in September as dealer trading softened and concern rose about the global recovery. The diamond industry closed a weak third quarter that reflected liquidity difficulties in the cutting centers and ongoing volatility in the financial markets. Economic and political developments continue to fuel caution.

In September the RapNet Diamond Index (RAPI) for 1.00 ct. polished diamonds fell 4.5 percent to 99.57. The 0.50 ct. category declined by 4.5 percent to 36.47, and 3.00 ct. dropped 0.9 percent to 168.04.

The third quarter of 2011 has been one of decline for diamond prices following a positive first half of the year: RAPI for 1.00 ct. diamonds fell 8.6 percent, while 0.5 ct. stones declined 7.5 percent, and 3.00 ct. diamonds dropped 5.8 percent.

According to the just released Rapaport Research Report, “Third Quarter Jitters”, polished trading is now being driven by retail demand to satisfy current orders, with limited trading among dealers. Stretched Indian liquidity continues to impact trading with those cash-strapped Indian suppliers willing to discount. Similarly, rough dealer trading is at a near standstill with De Beers goods being offered at deep discounts. While Chinese demand for diamonds and diamond jewelry continues to drive growth, the European debt crisis will have an impact globally.

"The diamond trade must accept the fact that diamonds are part of the real world and that diamond prices go up and down. Price volatility is to be expected and accepted as a normal part of doing business. Firms should develop strategies for dealing with downward moving markets. Smart sellers recognize that inventory cost should be based on replacement cost rather than historic cost. They remain profitable and support market prices by selling cheap and buying cheaper. Lower prices are a healthy part of the economic cycle as they create excellent buying opportunities and higher profits for smart buyers who ensure that diamonds remain an excellent value in uncertain times.” said Martin Rapaport, Chairman of the Rapaport Group. Additional information about the state of the global diamond market is available in the just-released Rapaport Research Report, “Third Quarter Jitters”, which is attached and can also be found at www.diamonds.net/reports or by emailing: This email address is being protected from spambots. You need JavaScript enabled to view it..

Rapaport Media Contacts: This email address is being protected from spambots. You need JavaScript enabled to view it.

USA
Sherri Hendricks
1-702-893-9400

International
Alissa Goren
1-718-473-0882

Mumbai
Mittal Kalsy
91-97699-30069

[componentheading]About the RapNet Diamond Index[/componentheading]

The RAPI is based on the best asking price in hundred $/ct. for the top 25 quality 1 ct. round diamonds (D-H, IF-VS2, RapSpec-2 and better) with GIA, HRD or AGS grading reports offered for sale on RapNet – Rapaport Diamond Trading Network. The RAPI is provided for various sizes. www.rapnet.com has daily listings of over 700,000 diamonds valued over US$5 billion and 6300+ members in over 74 countries.

[componentheading]About the Rapaport Group[/componentheading]

The Rapaport Group is an international network of companies providing added value services that support the development of free, fair and competitive global diamond markets. Established in 1978, the Rapaport Diamond Report is the primary source of diamond prices and market information. Group activities include publishing, research and marketing services, internet information and diamond trading networks, global rough and polished diamond tenders, diamond certification, quality- control, compliance, shipping, and financial services. Major activities of the group include the development of markets for Fair Trade Diamonds and Jewelry as well as the creation of diamond futures markets. Additional information is available at www.rapaport.com.

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