Diamond market needs a single regulator to balance prices and make it operate orderly. Lack of controls has already caused financial pyramids in India - world’s workshop for cutting diamonds, according to CEO of Russia’s biggest diamond producer.
“Now the companies do not have a clear policy. That’s why so many illogical things take place. De Beers brings to the market enormous volumes of rough diamonds which pushes the market into an spin. Following this step Alrosa independently starts decreasing prices. Both steps are bad for the market,” according to Maxim Shkadov, CEO at Russia’s biggest diamond producer Kristall, talking to RT.In India, a lack of market regulation has already led to a spread of “classic financial pyramids – like Sergey Mavrodi’s MMM in Russia,” the head of Russia’s diamond giant said. Now when the country is struggling to get the resources it doesn’t have domestically and with the huge financial resources accumulated, India’s Government spent a huge amount of money to support the country’s export of cut diamonds by stimulating purchases of rough commodity, Shkadov explained.This governmental programme led to financial frauds where a diamond could be used as a way to get credit. Some companies tried to make the most out of the situation, using the same diamond to get several loans, the Kristall CEO explained.Since there’s no a single regulator an informal agreement between the market players over the volume of the diamonds released onto the market would be the only solution, Shkadov concluded.