I don’t have any
argument about the
need for a price list.
The need for a price
list is well preserved.
This is what the
industry has been
used to. My main
concern is – what
is the basis of this
price list. The basis
of the benchmark
(per carat price)
that is unknown, far
from the eye and not
transparent is not
something that can be
relied up Lior eshed, Eshed
DiamondsThere is very less
information on how
diamonds were traded in
the pre Rap List era. All we know
is that handshakes were made
based on price per carat and a
general worthiness of the stone.
However, since 1978, the year
Rapaport Diamond Index was
established, the way diamond
industry functioned changed
overnight. A weekly price list
(which has now become monthly)
generated keeping the actual
asking prices as a baseline for
top-quality one-carat stones
became an industry standard.
Manufacturers, wholesalers,
dealers and retailers everywhere
in the world have been using this
proverbial list to buy and sell
their goods. You would be hardpressed
to find a dealer who does
not have the bright red Rapaport
price list on his workstation.
So, since the late 70s – early
80s, the industry has been
following a set international
price for diamonds (Rap List),
something that the colour
gemstone industry has not
been able to replicate. Agreed,
adopting a benchmark has helped
bring in more transparency in
the pricing system and garner
more consumer confidence but
not without a tradeoff – what is
supposed to be eternally rare and
valuable has been commoditized
so to speak. Gold as a commodity has also been following a market
price, but while every ounce
of gold is the same, no two
diamonds are the same. The Rap
List, since its inception has posed
two problems – one, it generates
its prices based only on carat,
colour and clarity, but diamonds
are beyond those parameters of
grading, there are other intrinsic
values in a diamond. Anybody
who has been in the industry long
enough would know that different
diamonds of the same grade can
look very different. The second
and more prominent problem
with the Rap List, something
that most dealers resonate with
is the monopoly and controlling
of diamond prices for several
decades. When the Rap List
alters, it impacts diamond prices
all over the world. Rap List,
which is also presumably based
on the simple economic law of
supply and demand, decided
to drop the prices recently,
when there was absolutely no
business happening around the
world, which led to the industry’s
furor. A benchmark price list
that has had the ability to make
or break businesses with its
decision to alter prices based on
a methodology that has hitherto
been ambiguous, has led many to
reflect on the problems associated
with the current system and a fair
way of arriving at benchmark
pricing.