In an effort to maintain world diamond prices, Russian diamond producer Alrosa will not flood the diamond market.
Alrosa has been building up a stockpile of diamonds since the fall in diamond prices last year.
Russia had been blamed for flooding the diamond market in the late 1990’s with rough (uncut) diamonds.This led to a fall in diamond prices for a long time, a move which was against the advice of De Beers , the worldwide distributer of diamonds.
According to Bloomberg, Sergei Vybornov, the Chief Executive Officer of Alrosa said “nobody wants to destroy the market”.
Due to the global economic downturn, polished gem prices have fallen by 31% according to polished prices. com. According to Gem Diamonds Ltd, polished diamond prices have fallen by 52% over the past one year.
Since the slump in diamond prices last year the Alrosa, the state run diamond producer in Russia has refused to put out any diamonds into the market. In order to maintain the output the diamonds are shipped to a government depository.
According to recent reports by De Beers and Petra Diamonds, there has been a halt to the declining diamond prices. The CEO of Gem Diamonds Ltd, Clifford Elphick said ” diamond prices rose by a single digit percentage”. Many market analysts and executives believe that the worst may be over.
This month Alrosa is to resume sales of rough diamonds. Rough diamonds worth 1 billion USD will be sold to 15 companies in Antwerp, during the course of this year.
Accprding to Bloomberg, Sergei Vybornov said due to the large reserves of diamonds by Russia, Alrosa will be in a position to buy diamond companies that cannot survive the economic downturn.