Hundreds of companies have pulled their goods from RapNet and are now in search of an an independent and transparent third party operated polished diamond trading and buying platform, for diamond traders and retail jewellers worldwide.
The boycott began after steep diamond price drops on the March 20 Rapaport Price List caused widespread anger in the trade. With countries going into lockdown during the COVID-19 pandemic and suppliers having almost no sales, the sudden drop (of roughly 8%) in prices sent a wave of unrest through the markets.
Many of RapNet’s members believed the price change significantly devalued their inventory, and in response decided to remove stock from the online listing service immediately.
By the morning of March 23, RapNet, which generally listed $8 billion in inventory, listed only $4 billion.
In an open letter, a group of traders argue the latest polished diamond prices published by RapNet do not reflect trading prices in the global wholesale diamond market.
The letter says: “The current slow trade of polished diamonds is the direct result of the crippling effects of sovereign nations under total lockdown, not by supply and demand fundamentals. Therefore, the latest polished diamond prices published by the RG do not reflect trading prices in the global wholesale diamond market.
Price changes in either direction should be a reflection of actual trading prices and the volumes of polished diamonds bought and sold. Rappaport Group’s (RG) action of March 20 was, unfortunately, made without regard to either. We are alarmed and troubled as to the methodology and timing of establishing and setting market prices without trading activity in the market. RG’s actions are further proof that, over the years, it has operated and dictated polished diamond prices in a non-transparent manner, revising prices upwards or downwards, without offering any guidance, let alone a mechanism or rationale that lies behind its decision-making process.”
The large group of diamond traders and manufacturers from the major diamond trading centers say they no longer wish to depend on the RG platform and price index.
Until a new independent and transparent option is available, the traders say they will use the RapNet March 6 2020 price listing as a reference.
Responding to the revolt, RapNet founder and publisher Martin Rapaport announced that he was changing many aspects of his widely watched price sheet.
Among the most notable: The Rapaport Price List, which has been published weekly since its inception in 1978, will now be published monthly.
The new frequency will “give the industry time to react”, Rapaport said in a seminar. “Leaving a month between price sheets is going to give the industry an opportunity to breathe and give the industry time to interact with us and say, ‘You’re wrong here, you’re right there. Go up here, go down there.’ So we can have more interaction.”
Rapaport also said he will try to standardise the discounts on the list and keep prices about 30%–40% below the prices on RapNet.
During the COVID-19 crisis, he will extend the lower range of price sheet discounts to 45%.
He also plans to supplement the monthly list with a weekly “trade sheet” based on RapNet prices.
Meanwhile, the World Federation of Diamond Bourses (WFDB) announced that a state-of-the-art, “cross-bourse” trading platform is under development. It will very soon be available for the diamond industry and trade at large.