Commodity Online
SURAT: Surat’s diamond traders, who have been facing a shortage of roughs following the decision of global leaders De Beers, Rio Tinto and BHP Billiton to cut down on rough supply, may have a new option now in the form of www.exchange.dodaq.com

Even though the industry is facing a huge economic crisis, procuring roughs had become a problem for Surat’s traders as all the major suppliers had reduced supply.

The problem will be solved now with the Dealers’ Organisation for Diamond Automated Quotes (Dodaq) launching www.exchange.dodaq.com, the world’s first online diamond exchange, in Belgium’s Antwerp.

The exchange offers a two-way auction of round polished diamond between 0.30 and 1.49 carats for individual categories, thus creating real-time spot prices and the first cash market for diamond.

The two-way auction mechanism provides price transparency to eliminate the mystery of diamond pricing and allows the market to decide a fair value as in case of stocks, currencies and other commodities.

It is a crucial development considering the fact that over 50 per cent of manufactured diamonds are round, and of that over 70 per cent are between 0.30 and 2 carats. At present, India procures rough diamond to the tune of $6,904.40 million (April–December 2008).

The exchange accepts only certified diamonds from members of the World Federation of Diamond Bourses (WFDB), the Antwerp-based global federation of diamond miners, processors and traders.

Currently, there is no membership fee and Dodaq being a cash market, there are no margin calls on the exchange.

All client funds are held by ABN AMRO Bank and Dodaq uniquely offers instantaneous settlement, steering the industry away from the current reliance on credit.