TEL AVIV, Israel – The head of De Beers Group, which controls 40 percent of the global diamond trade, said Monday that the industry must develop new markets in China and India in order to avoid being overly dependent on sales to the United States, but he did not advocate replacing the U.S. dollar as the main currency of the international gem trade.
Speaking at an international conference on rough diamonds in Tel Aviv, De Beers managing director Gareth Penny said the dollar's continued decline against the euro and other major currencies raised questions about its continued suitability.
"There are people speculating that we are in a structural period of weakness for the major currency of our business," he said. "What are we going to do about that?"
But in comments afterward to The Associated Press, Penny said that De Beers was not suggesting a currency switch.
"I don't think we're advocating it particularly, but there certainly are others in the industry who are," he said.
He said that that the United States accounts for 50 percent of world diamond sales, but if the gem industry is to grow, it must seek additional customers elsewhere, particularly in the expanding economies of China and India.
"I think that's ultimately where the future growth of the industry lies," he said. "America's a big market ... the challenge now is can we get other markets to grow, so we're not so dependent on the U.S. market."
Israel does not produce diamonds itself but is a leading polishing and trading center. The Israel Diamond Institute, host to the two-day conference which opened Monday, claims to have the world's largest diamond trading floor and says Israel exported polished diamonds worth over $7 billion (euro4.8 billion) in 2007.
Penny is a supporter of African efforts to have more of the continent's gemstones polished in Africa, saying such a policy can help create jobs and encourage stability in African democracies.
He told the AP that the development of the necessary facilities and skills in African producer states is still in its infancy, but with industrywide backing would be a viable goal. He added that De Beers has pledged to sell rough diamonds to local manufacturers.
"Right now there are many factories being built in southern Africa," he said. "We've publicly said that by 2009, we're going to be supplying a billion dollars of rough (diamonds) into those factories."