The Russian state diamond company's chief executive Fyodor Andreyev said in his address to the 34th World Diamond Congress on Sunday that Alrosa and the state stockpile agency Gokhran are considering the sale out of Gokhran stocks of “$500 million to $800 million worth of rough...by the end of the year in order to stop supporting the speculative demand from the market."

Andreyev said that there is a danger of an unsustainable bubble in prices.

“A price bubble is emerging in the international diamond market,” he told delegates, adding that Alrosa’s long term supply contracts are one way of combating speculative price tendencies. Another way was by using Gokhran stock sales, such as De Beers's Central Selling Organisation used before De Beers liquidated its buffer stocks.

"Prices are already close to the price level of 2008,” Andreyev said, “and the situation begins to repeat itself. So we are once again faced with the question of how to regulate this market. Stable, predictable market transparency is the keyword today," he claimed. “The state is now becoming an active player in the market. There is currently a discussion with the Finance Ministry [the idea] that one source of price-fixing deficiency and protection against ‘bubble’ could be those [stockpile] reserves that are accumulated by the State.”

Although Russia’s diamond stockpile volumes, values, and operations have always been classified a state secret, Andreyev told delegates that operations with the Gokhran stockpile would add transparency to the market, and to bank lenders to diamond miners like Alrosa.

Andreyev: "At the peak of the crisis, the main issue that arose from the banks - this was the opacity of the industry, its pricing mechanisms, the capacity of production. And all this we have to change. Now we have become more open, to give information to the market, and interact with manufacturers.”

Following Andreyev’s comments that the current price trend in the rough market is speculative and that supply continues to fall short of demand, De Beers issued a statement saying: "We believe that this process is due to strong demand in the holiday season and is not a speculative growth."