MOSCOW, December 9 Sanctions on Russian diamonds from countries » G7″ could lead to a local jump in prices for these precious stones, and prices for diamond jewelry could also go up, according to experts interviewed by .
Earlier in November, the G7 countries shared that they would introduce restrictions on the import of industrial diamonds mined, processed or produced in the Russian Federation by January 1, 2024. In addition, the G7 states announced that, starting March 1, they will begin to introduce phased restrictions on the import of Russian diamonds processed in third countries. As noted in the group's summit statement, G7 countries that are active importers of rough diamonds will create a mechanism to verify them based on tracking and certification by September 1, 2024.
“Russia is one of the key players in the diamond market; an import ban could lead to a local jump in prices for precious stones, especially larger ones,” Dmitry Puchkarev, a stock market expert at BCS World of Investments, shared his forecast.
He also noted that the Russian diamond producer Alrosa has been working for a long time under the threat of sanction pressure, and therefore the company has rebuilt its logistics and sales markets in advance. “The effect on the company and the volume of tax payments should be moderately negative, mainly through an increase in discounts on the cost of stones to the levels of other suppliers and a decrease in sales margins,” explained Puchkarev.
Independent industry expert Leonid Khazanov also suggested how world prices for precious stones would react to the imposition of sanctions on rough diamonds from Russia. According to Khazanov, “a price jump has not yet occurred, perhaps due to the players calculating ways to circumvent the sanctions.” However, the expert suggests that such a jump may occur in the near future. “I still allow prices to rise by 10-15% in January 2024, although it may not last long, since the demand for diamonds is weak,” he explained.
According to Boris Krasnozhenov, head of the analytical research department at Alfa Bank, Western sanctions on Russian diamonds should not be regarded as a disaster for Alrosa. The expert assessed the demand for diamonds in developing markets as growing, and the expert called consumption in these markets in diamond equivalent exceeding Russian production by “at least a third.” Krasnozhenov suggested that Russian raw materials would be enough for 9-10 months of consumption in China, India and other Asian countries.
«In our opinion, the industry still did not sit idly by; sanctions are increasingly of a “cosmetic” nature, so we definitely shouldn’t expect any kind of apocalyptic scenario. All non-market interventions are an additional tax on the consumer. So diamond jewelry will not become cheaper,” summarized the head of the analytical research department of Alfa Bank.