Economic uncertainty is once again taking its toll on the diamond industry, including Harry Winston Diamond Corp.

During the credit crisis of 2008 and 2009, diamond prices simply collapsed. While nothing that serious is happening today, diamond polishers are selling off their inventory and reducing purchases of rough diamonds, thus lowering prices.

The polishing industry is largely underwritten by European banks, which are under pressure because of sovereign debt problems. Credit facilities are not being increased, so the polishers are reducing rough purchases and increasing their liquidity in case the debt problems get worse.

That is an issue for Harry Winston, which produces rough diamonds from the Diavik mine in the Northwest Territories. On Monday, the company deferred rough sales into the fourth quarter, and possibly beyond, rather than sell them into “an unstable market that seeks bargains.” The company did not offer specific guidance.

Edward Sterck, an analyst at BMO Capital Markets, previously anticipated that Harry Winston’s lower-than-expected sales in the second quarter would be largely rebalanced in the second half of the year. “A further reduction in sales through the remainder of the year is likely to negatively impact earnings forecasts,” he wrote in a note.

Previously, he thought Harry Winston could offset a pullback in rough prices by producing higher value diamonds at Diavik. He rates the stock a Market Perform with a price target of $18.00 a share.