DUBAI // Members of the global gemstone industry have gathered in Dubai to address urgent concerns over volatile commodity prices amid roller-coaster market conditions. The inaugural International Gem Show Dubai, a three-day exhibition hosted by the International Coloured Gemstone Association (ICA) and the Dubai Multi-Commodities Centre (DMCC), was created in an effort to establish a commodity marketplace in Dubai providing industry-specific infrastructure and facilities.
More than 1,000 delegates from around the world gathered yesterday to address several challenges facing the industry, including a highly controversial ban on Myanmese gems by US jewellers, as well as strategies for coping with global price fluctuations. "People feel very insecure," said Andrew Cody, the president of ICA and an associate of the Australian Museum. "They buy a product one day and the next day it's lost 30 per cent of its value - it's just crazy."
While the recent tumble of markets around the world has resulted in a slide in the prices of precious and semi-precious gemstones, the first half of the year saw an overall price increase. According to the IDEX Online Polished Diamond Price Index, the price of gemstones were up by 8.1 per cent in the first eight months of the year compared to the same period last year. Similarly, polished diamonds surged by nearly 15 per cent from January to August this year.
Known in the industry as the "City of Gold", Dubai has worked hard this year to establish itself as a hub for the diamond, gemstone and pearl trade through programmes commissioned by the DMCC. Last year, the DMCC and ICA joined forces to launch the Middle East GemBureau, a Dubai-based facility designed to meet the needs of ICA members and trade representatives. "The Coloured Stones and Pearls division of DMCC has very much been about dealing with the very fragmented market, and how we can position Dubai as a hub for trading," said Gaiti Rabbani, the division's executive director. "So we are leveraging on the strengths of the retail market for gold and diamonds and translating that into coloured stones as well."
There are many hurdles to cross before Dubai reaches the potential envisioned by the DMCC. First, gems pose major challenges because skilful imitations, substitutes and enhancements mean fraudulent products can often pass as genuine stones. Grading and pricing are also difficult to pinpoint and require considerable industry experience. Dubai also has significant customs issues complicating efforts to do business with international players, several exhibitors at the show said yesterday. Markets around the world have implemented the ATA Carnet System permitting tax exemptions for goods temporarily admitted into a country, for example, for exhibitions and trade shows. Dubai has not implemented this system - something officials said was one of the major challenges they faced in growing the local industry.
"It is a big issue, because there are a lot of markets internationally, like Hong Kong, where they wave customs duties on certain industry sectors including the loose stones industry," said Ms Rabbani. "That doesn't apply here, so it is a very complex procedure in terms of bringing goods in and declaring, and putting down deposits for customs duties, and things like that." Delegates also voiced their disapproval of the ongoing US import ban against so-called Myanmese "blood gems" following claims that the stones went toward financing the country's military junta.
Mr Cody and several members of the gemstones industry insist the ban would have a negative impact and cause collateral damage upon poor populations engaged in mining, processing and trading activities in Myanmar and other countries. vsalama@thenational.ae
