I've been in diamond output on small to medium scale since June 1998, Ceo on an alluvial diamond mine in South Africa. The other day I overheard someone state that he wanted to buy his wife a diamond ring, but rather went for another gemstone because of the price. This amused me; can it be that diamonds are so high-priced in a store? The same man turned to me and descry
- "You (meaning the producers) must be very happy with the the way the diamond price increased the last 5 years!"
I just turned away and started talking about the weather, because we're not happy, far from that!! You see, although diamond prices has skyrocketed for the consumer in the last 6-8 years, the producer has seen very diminutive increase in the price we get! Unlike the diesel price, which was
Here's an example:
.23 in 1998 and we now pay .52 in 2008 (that is a 565% increase), the diamond price stayed pretty garage for the producer.Diamond
In late 1999 we found a 22ct, I color, near spotless diamond, which were sold in early 2000 for 81.81/ct. At the starting of 2008 we found another 22.76ct, I color, near spotless diamond (the shape was just as good, if not good than the one in 1999, and it was as similar as one could wish for, perfect for comparison). This diamond was sold in mid 2008 for 33/ct.
That is an increase of 15% over 9 years. This isn't good math for any business, and for this intuit hundreds of medium sized mines had to close their doors, or pits in this case. In turn, with output going down, the consumer will pay even more for this precious stones.
Another factor, which kept the price low for the producer and high for the consumer, is the gold price. Any diamond producer can tell you that a high gold price = low diamond value for the producer, it's an unwritten rule! I intuit it works like this: The store needs jewelry in all shapes and sizes, diamond gold rings, diamond gold earrings, diamond gold watches etc., with the emphasis on diamond and gold. If whether the gold price, or diamond price should unexpectedly rise, the store wouldn't be able to cope with the dramatic increase in price. Because gold is the currency of trading in the worlds, diamonds have to play second fiddle. Since 1998 the gold price grew from 0 to a whopping 00 in 2008. 400% increase. But the store didn't only compensate for the increase in the gold price, but also charges for a 250% increase in diamond prices. But the producer never sees this increase and the money ends up in the pockets of the middleman!
Large diamond mines are end in South Africa and the whole of Africa, and sooner than later the big companies will have to dig into their resources to find diamonds to sell - and for this they Will charge an arm and a leg. The question is big, the provide is little!
brilliant Prices - How Have They Changed Over the Years?
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