When diamond industry members are sitting on stocks of goods that they obviously cannot sell, the recent decision by Martin Rapaport of the Rapaport Group to reduce the prices of goods on his pricelist was extraordinarily insensitive and ill-timed. The diamond trade has been trying for some years to reach an accommodation with Rapaport over when and by how much he reduces the prices of goods. Despite agreeing to consult with the trade in the past before making announcements, this has all come to nought.

There has been a furor and some kind of a revolt following Rap’s decision to reduce prices by 5-9%, with the average being an estimated 7%. He offered a public vote on his decision and an offer to suspend publication of the list until May, and that was overwhelmingly requested by people who took part in the vote – with the vote being 78-22 in favour of suspension.

Rapaport said in a public announcement: “It is vital that the Rapaport Price List reflects the realities of the market even when such realities are not pleasant or welcome. We cannot protect the market from price changes and must maintain the credibility of our price information,” he said, adding that the list is “used by buyers and not just sellers".

He added: “We cannot misrepresent prices for the benefit of sellers and we must not mislead buyers. While many in the diamond trade wish to maintain inventory values, this is not possible in the current environment.”

Following his announcement regarding the new price list, and before the vote was held, a backlash developed: the World Federation of Diamond Bourses appealed to diamond companies to remove their goods from RapNet – and many firms have done so. Not only that, but the WFDB moved to create what it says will be a "a state-of-the-art trading platform available for use by all members of all bourses, to be created with the needs of WFDB members in mind, and backed by the peace of mind that comes with knowing that every transaction will be protected by the WFDB’s unparalleled and unique arbitration system. The WFDB believes that a cross-bourse trading platform, underpinned by the WFDB’s and affiliated bourses' world-renown arbitration system, would help further the WFDB’s core missions to promote the international diamond trade and the resolution of disputes between individual members of the affiliated bourses through arbitration.

While the site is being developed, the Israel Diamond Institute is allowing all WFDB members to use its international trading platform at www.get-diamonds.com, the WFDB added. Meanwhile, another well-known industry body – IDEX Online – has also spotted an opportunity to grab some market share by offering free access to its diamond trading platform until August 2020. IDEX says that its price index is updated every hour and is derived from a trading inventory of more than 700,000 polished diamonds. "The index is unbiased, market-driven and is the most reliable indicator of market movements.

Industry response and angst pushed Rapaport to hold the vote to suspend the price list decision and push such an important decision till May. As mentioned above, this is not the first time that Rapaport has faced anger from his members; in the past. “This is indeed a crisis time and Rapaport had no choice but to pull back the price list,” said a leading diamantaire.

The New Jeweller Group ponders whether it is, indeed, time for an alternate diamond pricing platform to save the industry from monopoly business practices, unavailability of a widely used alternative method of benchmarking prices, and the absence of healthy competition in diamond pricing?