How big is the diamond industry in Israel?

Exports from India to the United States declined by only 21 percent. India’s market share in the US remained stable at 20 percent in the 2005-2008 period, but it went up in 2009 to 25 percent. This represents a 25-percent increase in its market share! Belgium maintained a market share in polished imports into the United States of 18 percent, which is the range it has held throughout the last five years (see Table 1).
So it’s not just the fact that Israeli sales to the United States fell by 41 percent, which by itself is bad enough. What is of great worry is that our performance was so miserable when compared with India and Belgium. We all faced the same international crisis, but we did not have the same banks.
In Japan we see the same story. Israel’s market share in Japan’s imports went down to merely 9.8 percent while India's share rose to a hefty 42.1 percent. Belgium’s market share hovers in between them. But what we want to measure is the decline of 2009 over 2008. Israel’s exports went down by 38.3 percent while India saw only a very slight drop of 10.4 percent. As Japan’s total diamond imports were 19.7 percent below the previous year, it is clear that Israel’s loss was India's gain.

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Israel's Diamond Exchange (IDE) center is a huge complex which plays a major role in Israel's economy. The IDE center is comprised of a complex of 4 buildings, 90,000 square meters and 1000 offices and many other important services. The IDE center is always bustling, with traders from all over the world, who seem to spend half of their lifetime in inspecting diamonds from a close distance. About 2800 private membership share ownership over the IDE. The IDE is overall in a growing trade, but on the other hand there's a slow decline in buyers who purchase diamonds in the center. In recent years the US purchases about 50-60% of Israel's polished diamonds, with Hong Kong taking second place with about 20%.

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Israel's diamond cutting industry is very vital to the US polished diamonds' import. About 55% of the US diamond imports come from Israel. This alliance is very strong, but both Israel and the US are very concerned of changes in the diamond industry. Some of the recent changes have to do with the global economic crisis and are likely to disappear once the recession will be behind us, but some trends in the diamond industry have began several years ago, including the growing diamond production economies in India and China, growing demand for polished diamonds in the same two countries, compared to the more sluggish (though still #1) economy in terms of development in the US. How will Israel adapt to these changes? Perhaps export more diamonds to China, perhaps hire cheaper labor, or perhaps become slowly defeated by the eastern diamond industries. With the smart and powerful professionals managing Israel's diamond industry I believe that Israel would remain one of the biggest diamond centers in the world for the next several decades, if not more.

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