Diamond Nissan Perla Holds Strong Position in New York
2010: Diamond Nissan Perla Is the Secretary of Diamond Club
When you want an opinion on the diamond market, there is no one better to ask than Nissan Perla. In addition to being the owner of Olympic Diamond Corp., one of the biggest and most important companies on 47th Street, Perla holds the prestigious position of Secretary of the Diamond Dealers Club, one of the world’s largest bourses.
We recently interviewed Perla for his opinion on the diamond market, the importance of business ethics, and whether diamonds will always retain their value:
The Diamond Registry: The diamond market is slowly coming out of the recession. Do you think people still have the desire for diamonds? Are they still a girl’s best friend?
Nissan Perla: Absolutely. Right now, America is still working its way out of the most serious economic downturn since the Great Depression. Generally, research has found that, in times of hardship, people reevaluate what is important to them. And that means thinking about the people who are close to you. Success and prosperity may be fleeting, but love and your ties to your family are not. They are “forever.” That is what diamonds represent.
While many people just wear diamonds for fun or because they are beautiful, diamonds are best known as a symbol of love and of emotional commitment; you only give them to people who you know will stick by you through all the up and downs.
So now that we are coming out of this downturn, I believe that people are going to want to say “Thank you for supporting me” to the important people in their life. And one of the ways we as humans express love is with flowers, chocolates ... and diamonds. I am convinced that diamonds are very well-positioned to take advantage of the improving recovery. The future is looking very bright for this industry.
The Diamond Registry: Do you think diamonds will hold their value in years to come?
Nissan Perla: Yes. Let’s examine what most economists and experts say about the supply and demand curve in diamonds. Over the next decade or so, the economies in countries like China and India will continue to grow. For instance, the International Monetary Fund says that the Gross Domestic Product in India will grow 8.75% in 2010, while in China it is forecast to grow 9.8%. The economies in these countries are significantly out-performing America’s, as well as the economies in Europe and Japan.
With such incredible growth, we are seeing the middle class in these countries also increase exponentially. Both India and China have strong jewelry traditions in their culture, so it’s not surprising that both have become extremely strong markets for diamonds.
Like most economic forecasters, we expect that demand for diamonds in both these markets will rise significantly in years to come. For instance, China’s share of the international diamond market is likely to double, to 16% in the next few years. That is an incredible statistic!
At the same time, the available supply of natural diamonds is shrinking. There hasn’t been a major new discovery of diamonds since four mines were discovered in Canada in the 1990s. As everyone knows, diamond mines are not easy to find. And not only is the supply of natural diamonds not growing, some of the older mines, such as the Argyle mine in Perth, Australia, are coming to the end of their life.
Recently, De Beers, which controls 40% of the world’s diamond production, said that it plans to scale back diamond production to extend the life of its mines. So this year, they will mine 40 million carats, while in years past they mined 48 million. The head of De Beers explained that, “Diamonds are a treasure of nature that should be properly protected.”
All told, the Financial Times recently wrote that diamond production will likely be from 135 million and 140 million carats a year between now and 2015. By contrast, in 2008, and it was 160 million carats. So it is likely we will see a continual production shortfall over the next decade.
Using simple math, with demand increasing, but supply decreasing in years to come, it has been clear for quite some time that the value of diamonds will go up. And that is currently being reflected by the rough diamond market. Rough prices have risen considerably since the beginning the year. One leading South African analyst even predicted they will rise five percent over the next few years. And generally, when rough diamond prices rise, polished prices eventually follow.
To sum up: all indications are that diamonds will not only retain their value, but that their values will increase. If you buy a color TV set or Ipod or even a car, its value goes down considerably after you buy it. That is not true for diamonds. So I think that should give people confidence in their diamond purchase.
The Diamond Registry: Speaking of confidence, how important is it for people to have trust in the people they buy diamonds from?
Perla: As Secretary of the Diamond Dealers Club, I know the importance of ethics in our industry. The Diamond Dealers Club has always been a major supporter of proper business practices in our business.
I am happy to say that The Diamond Registry has been in business for over five decades and for all that time The Diamond Registry has been a member of the Diamond Dealers Club. It is also a member of many other important industry organizations with strong ethical rules, such as the Jewelers Vigilance Committee and the Jewelers Board of Trade.
I know a lot of people reading this may be concerned about accidentally buying “conflict diamonds” or “blood diamonds.” In 2003, the diamond industry instituted the Kimberley Process Certification Scheme, a United-Nations backed program that has reduced the amount of blood diamonds from four percent of the overall total to less than one percent. Of course, just one diamond linked to conflict is too many. But that is quite a record of achievement!
All Diamond Dealers Club members have to pledge to follow the Kimberley Process and to not trade in conflict diamonds. The Diamond Registry has always been a strong supporter of the Kimberley Process, both in the pages of its newsletter and in practice. When you buy from the Diamond Registry, or other members of the World Federation of Diamond Bourses, you can be sure you are not buying blood diamonds. Instead, the Diamond Registry supports the gemstone industry in countries like Botswana, where diamonds have transformed one of Africa’s poorest countries into one of its most prosperous, and revenues from diamonds go to provide citizens jobs, education and medical care.