Paz: Rising Rough Costs Will Bring Manufacturing Back to Israel

While noting rising prices of rough diamonds, Israel Diamond Exchange President Avi Paz said that manufacturing of mid-range diamonds can return to Israel and be done economically.

Israel, once a major polishing center, now mostly polishes larger and expensive goods, for which the cost of labor is marginal. “As the price of rough diamonds is rising, the cost of labor as a component [in the cost of polishing] decreases,” Paz said.

At the same time, labor costs are rising in centers such as China, and therefore polishing of mid-range goods could soon become economical in Israel again, Paz said.

Speaking at the Israel Diamond Industry Dignitary Award ceremony in Tel Aviv Thursday, Paz said Israel’s exports of polished will increase this year in value, and hopefully in carat volume as well.

In the past few years, exports of polished diamonds from Israel have continually grown in value, however in terms of volume, exports have been far from stellar.