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Israel's net exports of polished diamonds (after accounting for returns) dropped 37.1% between 2008 and 2009, from $6.24 billion to $3.92 billion, according to figures released by the Diamond Controller at the Ministry of Industry, Trade and Labor, Shmuel Mordechai.

Israel's diamond industry was hit harder by the global economic crisis than any other branch of industry in the country. Net exports of rough diamonds declined by 42.9% from 2008 to 2009, to $1.90 billion, compared to $3.31 billion in the previous year. Net imports of polished diamonds fell by 42.5%, from $4.36 billion in 2008 to $2.50 billion, while imports of rough diamonds decreased 44.2%, from $4.47 billion in 2008 to $2.50 billion in 2009.

Industry experts noted that while the recovery in sales of diamonds that began in the third quarter of 2009 picked up significantly in the fourth quarter, these figures do not reflect a true recovery. When the global economic crisis hit, in September 2008, international diamond trading halted almost completely. In the last quarter of 2008 and the first quarter of 2009 exports of polished diamonds from Israel, and the worldwide trade in diamonds overall, fell by 70%-75%. In some months no exports were recorded at all. In the third quarter of 2009 - the start of the "recovery" - exports of polished diamonds were off by "only" 50% from the parallel quarter of 2008.

While industry figures reported a rise in the export of polished diamonds in the fourth quarter of 2009, ministry data points to a 15% drop compared to the parallel quarter of 2008, itself one of the worst periods ever for the industry.

The decline in sales led to an increase in the number of diamond traders who asked Mordechai to remove them from last year's list of leading traders. The Ministry of Industry, Trade and Labor is considering not issuing the list at all. If it does, however, Lev Leviev will head it once again. Leviev deals in both unpolished and polished diamonds, and owns stores in New York, Moscow and Dubai.

Despite the dramatic plunge in diamond trading worldwide, the prices of rough diamonds rose significantly to near their pre-crisis peak. Industry figures noted that diamond giant De Beers led the wave of price increases. The prices of polished diamonds have lagged behind, and there is fear that the behavior of the suppliers of unpolished diamonds will lead to a new crisis in the industry.