During a lecture on the state of the diamond industry, diamond industry expert Martin Rapaport, founder of the Rapaport Group, detailed the challenges that the various global markets face as well as suggesting better ways to conduct business.

Rapaport addressed issues of the diamond pipeline, internal forces that impact the business as well as the opportunities they may provide.

Rapaport discussed the difference between rough diamond prices and polished diamond prices, noting the difficulties of selling at a profit when polished prices are lower than rough prices. He detailed a number of types of industry players who facilitate this price incongruity for various reasons including securing diamond supply and making profit by operating a type of monopoly.

"I am trying to explain why rough prices become too expensive for the normal diamond manufacturer,” said Rapaport, warning that high rough prices destroy the profitability of diamond manufacturers. He also noted that the situation in which the mismatch of rough and polished prices is facilitated is unsustainable since the flow of money funding this will dry up.

"Your real inventory is your knowledge. Your ability to adapt or change to a global environment - that is what it is all about,” encouraged Rapaport, warning against buying unprofitable rough diamonds.

Turning to a global assessment Rapaport noted that “India is very important but it has severe problems that impact the entire industry.” He discussed the problems that the rupee currency is facing and its foreign currency crisis.

On the subject of Israel, Rapaport said that he thinks that Israel’s greatest opportunity is to become the world’s primary diamond trading market. "Israel adds value by getting the right diamonds to the right people at the right price at the right time,” said Rapaport.

Regarding investment diamonds, Rapaport noted that “We have an opportunity to bring more money into the diamond industry. In order to do this we need quality and transparency. The development of investment diamond markets will play a major role in the future development of the diamond industry as they increase demand, improve liquidity and significantly reduce risk,” explained Rapaport.

In conclusion, Rapaport said that the future is bright for firms that support and participate in free, fair, ethical, transparent, efficient and competitive markets. “While the short term market outlook is problematic, there is great long term opportunity for firms that legitimize their operations, avoid unsustainable subsidies and diligently ceasing unprofitable activities,” concluded Rapaport.