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ISRAELI INDUSTRY RECOVERS AFTER STRUGGLING IN 2020,
LOOKING TO RAISE PROFILE IN UAE, BAHRAIN AND QATAR

 

Israel’s diamond industry recovered strongly in 2021, following an extremely tough 2020, when weighed down by the crisis brought on the by the COVID-19 pandemic, exports and imports had crashed. Indeed, reported the Diamond Controller at Israel’s Ministry of Economy and Industry, figures registered over the past 12 months surpassed not only those from one year previously, but also those reported in 2019, the year before the onset of the crisis.

According to industry data, net polished diamond exports – meaning exports of good after returned materials have been accounted for – totaled $3.65 billion. This was an increase of 54 percent on the amount reported in 2020, and 7.5 percent compared to 2019.

Net polished diamond imports equaled $2.94 billion, up an astounding 91 percent when compared to 2020 and 21 percent compared to 2019.

Israel’s rough diamond also reported sharp uptick in trade. Net exports of rough diamonds stood at $1.8 billion, an increase of 109 percent when compared to 2020 and 25 percent compared to 2019.

Net imports of rough diamonds to Israel totaled $2.07 billion, an increase of 94 percent  compared to 2020 and 17.5 percent compared to 2019.

The Israel Diamond Exchange complex in Ramat Gan

The Israel Diamond Exchange complex in Ramat Gan.

FREE TRADE ZONE UNDER CONSIDERATION

“I do not think anyone, just a year ago, expected such a rapid recovery of the industry,” stated Ophir Gur, Diamond Controller and Director of the Diamond, Gemstones and Jewelry Administration at the Ministry of Economy and Industry. “The impressive figures reflect the worldwide growth trends in the diamond and jewelry industries, but there were also local reasons, first and foremost the direct trade with the UAE, which began at the end of 2020 and was a significant factor in 2021.”

“We are very gratified by the industry’s excellent performance during 2021 and we are optimistic for 2022. We believe that the first quarter will show strong demand for diamonds as U.S. and other diamond buyers replenish inventories that were vastly reduced during the 2021 holiday season,” stated Aviel Elia, Managing Director of the Israel Diamond Institute.

Sources at the Ministry of Economy and Industry said that in order to ensure continued growth of the diamond industry, the government was considering implementing a free trade zone for diamonds.

GROWTH POTENTIAL IN THE ARABIAN GULF

The creation of a free trade zone may be a solution to what many consider to a regulatory bottleneck that is restricting trade between the Israeli industry and its newest major trading partner, the United Arab Emirates. Its diamond sector is almost entirely located in the free trade zone of the Dubai Multi-Commodities Center.

The potential increase in diamonds traded between Israel and the Arabian Gulf is the result of the Abraham Accords, which originally was concluded by the State of Israel, the United Arab Emirates and the United States, on the laws of the White House in Washington, D.C., on August 13, 2020, but subsequently came to refer collectively to a set of agreements between Israel and the UAE and Bahrain, respectively.

Just one month after the original Abraham Accords were signed, the Israel Diamond Exchange and the Dubai Diamond Exchange concluded a strategic agreement of collaboration to promote cooperation and dialogue between the two bourses.

Israeli and UAE industry leaders at the opening of the DMCC office in Ramat Gan

Israeli and UAE industry leaders at the opening of the DMCC office in Ramat Gan, from left: Martin Leake, DMCC special adviser; Yoram Dvash, then president of the Israel Diamond Exchange; Ahmed Bin Sulayem, DMCC executive chairman; and Eran Zini, managing director of the Israel Diamond Exchange.

 As part of the agreement, the Israel Diamond Exchange (IDE) opened a representative office in Dubai and the Dubai Multi Commodities Centre (DMCC) opened an office in Ramat Gan.

Three months later, during a visit to Israel by the Bahraini Minister of Industry, Commerce and Tourism, the CEO of the Bahrain Bourse Sheikh Khalifa bin Ebrahim Al-Khalifa and other high level government officials visited the Israel Diamond Exchange and signed memorandum of understanding.

In December 201 it was reported that Qatar and Israel, which do not have formal diplomatic relations, have signed a diamond trading agreement, which according to a report appearing in IDEX Online will allows Israel diamond traders to enter the Gulf country and set up representative offices. Qatar also is reportedly plans to establish a free trade zone for precious stones and gold, and also a diamond exchange based on the Dubai model.

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