Diamond demand to revive as prices of both rough and polished varieties have stabilised: De Beers

KOLKATA: Diamond business is likely to regain some sparkle this year after the slump in 2015, according to leading company De Beers, which expects demand to revive as prices of both rough and polished diamonds have stabilised.

All the stakeholders in the diamond industry can expect a better year, Stephen Lussier, CEO, Forevermark, De Beers told ET. “But market players are cautious as the macroeconomic environment is still fragile,” Lussier said.

“There are a lot of currency issues in Europe and Japan which if resolved can give rise to a further spurt in diamond demand. China demand is yet to pick up,” he said. Lussier said that the US continues to be the growth driver, with significant improvement in demand this year.

Diamond miners had cut down their production in 2015 and manufacturers, mostly based in India, had reduced their offtake of rough diamond from miners owing to the decline in demand.
“Stability in both rough and diamond prices will further boost demand,” Lussier said. Demand for solitaires is increasing in India, a trend which Lussier said indicates that the diamond market in the country is gradually gaining maturity.

“In India, Forevermark diamonds are doing well. In January and February sales grew 30-40%.

But the month-long strike in March on account of imposition of 1% excise duty on gold and diamond jewellery affected the sales,” Lussier said. “However, sales are expected to pick up from this month through May when Akshaya Tritiya is celebrated by Indians,” he said. As per the local diamond retailers, demand for solitaires is increasing more in northern and western India and to a lesser extent in south India, where consumers mainly prefer gold and platinum jewellery.

Gujarat, Maharashtra, Delhi, Punjab and Haryana are the major markets for solitaires.

Lussier, who has taken over as the chairman of Diamond Producers Association (DPA), said that the association will introduce its marketing campaign at the JCK Las Vegas jewellery show in June. The campaign will come just over a year after the DPA was formed in May 2015 by seven leading diamond miners, with an initial budget of $6 million.