There’s a lot of talk about whether rough should be traded in Antwerp or Dubai. But in the last year, a new market has emerged that could prove equally significant—online.
After two decades as a rough broker, Guy Harari says he first got interested in an online trading platform when he sat in his office and had an epiphany.
“I’m thinking, how come I can’t go on my computer and see what’s going on [in the rough market]?” he says. “Why do I have to travel all over the world, call all sorts of people? I can find the price of a hotel in Zimbabwe, but I can’t find this.”
And so last year, Harari, brother David, and Nurit Rothmann founded Bluedax, billed as the first online rough trading network (and it’s hard to argue).
Bluedax is not a one-click e-commerce site. Sellers post their goods, which are organized by company or producer/mine source. Buyers—who must be qualified—can then call the sellers and negotiate. Bluedax, acting as broker, gets a commission on each sale.
Harari says he is not sure why no one has set something like this up before, as polished diamonds have been traded online for years.
“I guess you can’t just come in with a technology background and set up something like this,” he says. “It is such an old-school business you can’t just come into it.”
Of course, given all the issues surrounding rough trading, the site requires buyers to have Kimberley Process certificates for their goods and qualifies both buyers and sellers.
“I would never take goods from someone who just comes in,” he says. “We are very strict about it.”
Perhaps as significant as the site’s trading mechanism is the regular reports on sales and marketing conditions it provides.
“Before, you had to call a lot of people to figure out what was going on,” he says. “This lets you see the market in real time. We are making the rough market more transparent.”
Harari feels this could have a positive spillover effect, given all the issues the industry is having with bank financing.
“In the diamond business today, there are problems of transparency,” he says. “If you are at a bank today and you take on a client, you need to evaluate his stock, how you see what is going on. This will make the business more easy to finance, more easy to trade.”
“We are bringing the rough market into the modern world,” he adds. “Someone had to do it. It turned out to be us.”