Russian Sanctions and Diamond Pricing - How to Support Ukraine Through Your Jewelry Purchase

Citizens of the world are reeling since Russia’s invasion of Ukraine, and are wondering about how to support Ukraine through their consumer purchases. As we are embarking upon a US embargo on Russian oil, it begs the question, “What jewelry products sold in the US come from Russia, and is there a way to avoid buying them?”

Russian Sanctions and How They Might Affect Your Jewelry Purchase

The primary jewelry products that come to the US from Russia are diamonds and palladium. Today we will focus on diamonds, as they account for far more of the market.

Alara has long been concerned about the ethics and fair sourcing of the jewels and gems we offer.

Unlike oil, the US government is unlikely to sanction the sale of Russian diamonds, so support for the Ukrainian people will have to come from the retail, wholesale, and consumer sectors. We are here to help you navigate these waters, so that your ethical concerns can be met.

To begin, slightly more than 10 percent of rough or cut diamonds that are currently available for purchase on the US market (first-time sale, as opposed to older, upcycled goods) originated in Russia. So, as a country, we are thankfully

not awash in Russian diamonds. Because of Russia being blocked from using the SWIFT international payment network system, the number of Russian diamonds in the US importation pipeline will reduce by 15% almost immediately, since direct importation of Russian diamonds is now effectively cut off. 

Since there is a four-month lag between diamond rough and ready-to-sell faceted diamonds, it will take a little while for the other major countries from which we import diamonds to further reduce the Russian diamond flow.

Diamond Pricing Increases Highly Likely 

As a consequence, for the next four months, Canadian and Australian diamonds will continue to be your best bet for steering clear of global injustices of every kind as relates to a natural diamond purchase. With that said, those two sources do not account for very much global production, and represent collectively less than 1% of what the US currently imports, so their pricing will undoubtedly rise significantly as demand will outstrip supply. 

Of the three major diamond cutting centers from which the US imports diamonds (India, Israel, and Belgium), Israeli-cut diamonds are the least likely to come from Russian sourcing as it currently stands. So, if a Canadian or Australian diamond is out of monetary reach for you, know that an Israeli-cut diamond is currently highly unlikely to have been cut from Russian diamond rough.

How to Support Ukraine through Your Jewelry Purchase

While all indications point to Israel and Belgium acting ethically and responsibly on the issue of Russian rough diamond sourcing, it will take 4 months for only non-Russian sourced rough diamonds to be cut in those countries and make it into the US market. Since Israel uses very little Russian diamond rough, their transition to zero usage should be relatively easy. 

Since Belgium currently imports quite a bit of Russian diamond rough, their transition will be more difficult. But Belgium is already seeking to increase their rough purchases from South Africa, Botswana, and Namibia, in the name of support for Ukraine. Botswana is one of the few growth diamond markets in the world, and they are seeking greater growth in response to Russia, which is leading to active investment in that country's diamond industry.

Disappointingly, it appears India is planning to continue importing diamond rough from Russia by developing a rupee-ruble exchange for cash payment, thereby bypassing the SWIFT cut-off.

Recommendations for Ethical Diamond Purchases

So, if you are looking to purchase a diamond between now and mid July 2022, our recommendation is to first and foremost, work with a reputable jeweler whose company mission includes ethical and fair sourcing, in order to help you:

  • Locate a Canadian- or Australian-sourced diamond (100% assurance)

  • Locate an Israeli-cut diamond (99.81% assurance) or Belgian-cut diamond (95.94% assurance)

  • Locate an antique or estate diamond (Alara always stocks such diamonds, and has many wonderful conflict-free sources for them)

  • Reimagine and repurpose an old diamond by having it re-cut in the US 

  • Consider a gem other than a diamond that has baked-in ethics and fair sourcing, such as our Montana sapphires, Yogo sapphires, and other amazing gems from the world over (as always, Alara chooses gems that are not from countries that turn a blind eye to child labor, and partners with many Fair Trade sources).

If your diamond purchase is planned for late July 2022 or thereafter, the assurance percentages above will continue to improve as Israel and Belgium shift their diamond rough sourcing to non-Russian.

Unless the Indian diamond trade decides to join the Russian diamond embargo, avoiding purchasing a diamond that was cut in India will reduce your odds of purchasing a diamond that was originally sourced from Russia to basically nil.

In a global trade situation, perfection is all but impossible, but the diamond industry has “earned its props” for responding to previous crimes against humanity; and has learned that a swift response speaks volumes and helps immeasurably. We are here to help you navigate these waters, so that your personal diamond selection decision meets your needs.

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