Even companies that track the diamond market say that this market "is not good at all — in fact it’s terrible”. That's the words of Charles Wyndham, founder of London's Polished Prices. So, why is it terrible? “The most immediate issue is liquidity.” Let's have a look at what is happening.
Engaged couples from USA accounting to 40% of diamond sales globally, continue to pay more and more for the diamonds every year and the reason behind this is the new regulations, imposed by governments and banks. New regulations are caused by the lack of liquidity, which makes raw diamond wholesalers to apply for more credits. This story lasts for many decades and today they take credits to pay for the old ones and there isn't any way out of this circle. By increasing the prices the wholesalers try to cover the expenses and pay for credits, but this results in decrease of demand only and makes them buy less from the producers.
Many companies like Petra Diamonds report on significant sales falling. For example in 2015 Petra's sales fell 41%. And this is due to banks and governments are stricting the laws for producers, making them pay more taxes and taking away all the huge profits they had seen in the past. Governments are concerned about the financial risk of borrowed money, which still keeps working many companies, that wouldn't be able to operate without the borrowed money. Risk reductions had already made Belgian bank KBC to shut down an office in Antwerp, Bank Leumi in Israel to leave the diamond business completely, and other banks, including ABN Amro in the Netherlands to tighten their lending standards.
Monopolists have replied to this with tightening of their own standards, trying to return the lost profits from wholesalers and buyers. For example, De Beers have imposed new requirements on the 85 companies authorized to buy raw diamonds: today they are obliged to follow the international accounting standards, review their finances by qualified auditors and reduce dependence on borrowed money, which is very costly.
The dependance on banks and governments results in the whole industry's slow collapse which can take many decades before it collapses completely, since monopolists are trying to keep the status quo.
This is why the world needs a new channels to trade diamonds like the Diamond Open Market.