Cutting and polishing centres like India, Israel and Antwerp do form vital cogs in the diamond pipeline. The producing centres, which slog and bear high exposures, are the source of all diamonds. And finally but most importantly comes the consuming markets. An update on some of these key centres:

India: One man's poison may be another's meat. Even as the industry worldwide reeled under recession, India with its expertise in small goods captured more than 50% of the cut and polished markets at around $5 billion during 1998. The markets are upbeat and the value addition has gradually risen to nearly 50%. Optimism all round, which has continued in the first six months of the year. But will this last?

Israel: It is one of the world's largest manufacturing centres for gem quality polished diamonds, producing polished from 10 points to the largest carat size. Israel supplies about $4 billion polished diamonds annually, out of an estimated $11 billion worldwide demand.

The crisis in South East Asia saw Israel lose 40% of its exports in a short period of time. It lost about 11% of its market share to India during the last year. Israel has bounced back in the first nine months as its polished exports rose by 13.8% to $3.19 billion in the first nine months of 1999.

Antwerp: This is the diamond capital of the world. It attracts and retains 50% of the world trade in polished diamonds and around 85% of the rough trading. Its cutting and polishing facilities are technologically advanced but the average age of a polisher is 40.

Russia: Cause for most of the heartburn in the industry for the last few years. The second largest producer with over $1-1.2 billion roughs mined per annum. After signing the three year contract with the CSO, it has been very restrained during 1998. No deviation from the terms of contract means no news of large scale leakages. However, financial difficulties makes it vulnerable and political pressure could see leakages hit the markers. Needs to be closely monitored. September saw a sprinkling of Russian roughs in Antwerp.

Canada: The new kid on the block, expected to add 10% to the world's rough production. After the signing of the contract with CSO for 35% of its produce, the uncertainty in the markets is over. Seen as an independent producer capable of expanding operations in various countries and becoming a counter to the might of De Beers.

US: The cornerstone of the world's diamond sales. Currently accounts for 46% of the world's retail jewellery market. If this pillar collapses, it could cause a flashback to the 1930s depression scenario when all diamond mines were closed. The US is expected to continue with its impressive growth rates (last year 9% growth). Still the main hope for the industry. Worse case scenario: stock market bubble burst, collapse of economy and fall of the dollar.

Internet: Sale of jewellery last year on the Internet aggregated $13 billion. Expected to grow up to $30-40 billion in 1999. Important medium tapped only in the US. A website has offered to sell 20,000 carats of roughs at a discount. Will this challenge the CSO in the long run?

Europe: Steady growth in consumption by 4 to 31%, partially offsetting the fall in the Far East.Japan & South East Asia: At the best of times account for 42% of the global markets (Japan 24% plus SE Asia 18%). Even now Japan is the second largest market in the world. Increase in imports during the year indicates breaking of the trend of almost three years of decline. There are signs of some improvement in business activity in certain markets in the Far East and this has also contributed to the improved mood that prevails.