De Beers keeps firm hold of diamond sales

Diamond buyers are "scared stiff" of the power of De Beers as money they get for cut gems fails to keep up with prices the company demands for rough stones, said the Israeli overseer of one of the industry's biggest exchanges.

"It dictates the prices. It dictates the market", Shmuel Mordechai, director of the Diamonds, Precious Stones and Jewelry Administration, said in his offices in the city of Ramat Gan, home to one of the main trading centers for the gems.

While De Beers isn't a monopoly, its market influence means prices are "not realistic", Mordechai said.