The Russian diamond trade is still not profitable. Manufacturers claim that many types of stones are not worth polishing. This is because the rough diamond material is no longer profitable after the process of production. This is especially true with regards to 1 carat diamonds. ALROSA's Alexander Malinin the head of Brillianty said.
"The price of a 1-carat stone doesn't cover the price of rough from which it was cut."
The rough that is the most interesting to polish at the moment are is 4-grainers to 6-grainers which produce diamonds of .30-.90 carats. Brillianty, which is owned and operated by ALROSA, buys diamonds from its parent company's at the same price as all its other clients and is the manufacturing facility of ALROSA. Nikoly Afanasiev, the head of sales for the country's largest manufacturer, Kristall Smolensk said that several percents still overprice 4-grainers to 6-grainers. The other issue is that Indian diamond firms are dumping prices because at the moment they have a liquidity problem.
Manufacturers and the Russian Diamond Trade
Manufacturers say that even though the Indian and Russian diamond markets serve different niches within the industry, the overall value of the diamond on the online markets are indistinguishable to the consumer who purchases an engagement ring. This leaves the Russian manufacturers who provide a superior product with regards to both diamond material and polish, at a serious disadvantage on the open market. Malinin goes on to explain, "the pressure from the Indian manufacturers is strong in the categories smaller than 0.30 carats. In India and which are not the major category for the Russian manufacturers. The pressure in the .30-.90 carat is much less." He goes on to explain that they will not be lowering prices despite this pressure from the market and, "this is a flat market at the moment and this situation may last for awhile."
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The Russian diamond trade is a billion dollar industry.