- EU has been inconsequential for years – Rappaport
- Producers should increase marketing spend, target US millenials
The Rappaport Group, which produces a periodical Report used as a baseline for pricing diamonds, says the United Kingdom’s shock referendum decision to exit the European Union will not affect diamond prices as “the EU has not been a major player for years now.”
“Brexit will not have a sustainable negative impact on polished diamond demand. The EU has not been a dominant diamond consumption center for many years. While a negative wealth effect due to declining currencies and equity markets will reduce EU and British commercial demand, global investment demand for higher quality diamonds as a store of value will increase due to global economic and political uncertainty,” it said.
Rappaport says the important U.S. market will remain healthy and retain growth. “We do not expect any significant medium to long term negative impact on the U.S. diamond market. While demand may benefit as a stronger dollar increases purchasing power, a short term decline in equity prices and wealth may reduce demand during the quiet summer months. Overall we expect a positive U.S. Holiday season this December,” it states.
“Brexit will intensify the pressure banks are putting on the diamond trade. Liquidity will continue to be reduced. While Brexit is not expected to significantly reduce overall polished demand, it will indirectly impact trade liquidity resulting in price volatility,” posits Rappaport.
“It is vital that rough diamond producers maintain price levels that ensure profitability and liquidity in the manufacturing sector during these uncertain times. Furthermore, producers must increase their marketing spend to ensure generic diamond engagement ring demand from U.S. millennial consumers,” it adds.
The Rappaport Report is the jewellery industry standard for the pricing of diamonds. The report is published weekly and given to jewelers and diamond merchants to set prices for consumers. The report is issued in the form of a table and prices diamonds based on the 4C’s of diamonds – carat, colour, clarity and cut.