The passing year has been tough on the global diamond industry and Israel was no exception: Israeli diamond exports shrunk by 40% in 2009, making it the sector to suffer the most from the global financial crisis.

According to data released by Shmuel Mordechai, the Israeli Industry, Trade and Labor Ministry's Diamond Controller, Israel's net diamond exports in 2009 came to $3,922,633,414, compared to $6,238,980,484 in 2008 – a 37.1% drop. Rough diamond exports shrunk by 42.9%, dropping from $3,314,401,186 in 2008 to $1,891,516,518 in 2009.

Diamond imports also suffered in 2009: Polished diamond imports in the past 12 months came to $2,507,926,359, compared to $4,364,609,432 in 2008, indicating a 42.5% decrease; while rough diamond imports slipped by 44.2%, declining from $4,474,658,453 in 2008 to $2,497,477,105 in 2009.

The United States remained Israel's top diamond export market in 2009 with trade coming to $1,554,946,499 – a decline compared to 2008's exports, which came to $2,689,553,039. Other major diamond export markets were (in decreasing order) Hong Kong, Belgium, Switzerland and India.

Israel's diamond trade was dealt a dramatic blow by the global financial crisis as trading in the last quarter of 2008 and Q1-2009 dropped by 75%. The second and third quarters of 2009 saw the market recover, but not nearly enough to make up for the year's dismal beginning.

The fourth quarter of 2009, however, spelled cautious optimism: The industry's performance last month was the best noted for rough diamond exports and imports over the past year - some 1.74 million carats – $346.46 million worth – in rough diamonds were imported by Israel in December, representing a 84.8% rise in volume and a 92.6% increase in value, compared to December 2008. Rough diamond exports in December came to 1.37 million carats, worth $175.96 million – a staggering 509.5% rise in volume and a 264.3% increase in value, compared to December 2008.