Rough Diamond Trade Slashed as Traders Fear Raids, Economic Decline

(IDEX Online News) – Israel's rough diamond trade suffered a large decline in the first half of 2012, as global demand for polished has moderated.

Net rough diamond imports totaled $1.993 billion, a 19.3 percent decline, according to figures released by the country's ministry of industry, trade and labor.

Net exports were slashed by a third, to $1.516 billion.

The declines are taking place against global difficulties, according to Diamond Controller Shmuel Mordechai.

In his comments, Mordechai also referred to internal sector problems, specifically to a series of raids by tax authorities and police that resulted in the exposure of an internal bank that allegedly transferred large amounts of cash in and out of the country.

The raids included confiscations of computers and documents as well as searches of safes.

The events led to a strong feeling of uncertainty among many Israeli diamond traders, especially to concerns that the authorities may confiscate diamonds too. In response, some traders preferred to keep their goods and trade them through their offices outside of Israel.

This contributed to the decline in international trade of rough and polished diamonds. Polished diamond exports in the first half of 2012 declined 18.9 percent.