Decline in demand from the US resulted in a significant drop in Israel's diamond exports in February.
Overall, $611 million worth of polished diamonds were exported in February 2006, a 7.8 percent lower than $663 million exported in 2005, same period.
The US served as the biggest export market for Israeli diamonds, accounting for 57 percent of the country's total diamond exports, followed by Hong Kong at 22 percent.
However, the fall in disposable income in the US led to a drop in demand for diamonds.
Hike in oil prices, increasing mortgage and pegged up interest rates affected the middle class families and restricted luxury spendings.
However, imports of roughs to Israel rose nine percent in the same period to reach $433 million, up from $397 million.
Nonetheless, since the beginning of the year, imports of roughs have fallen 5.7 percent.
Shmuel Mordechai, Diamond Commissioner, Ministry of Industry, Trade and Labor believes that it was early to predict the outcome for this year.
He also added that Israel needed to develop more foreign markets and not remain dependent on the US.
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