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Tuesday, April 19, 2011

Global Diamond Demand and Prices are Up

During the past couple weeks, diamond centers throughout the world have been reporting on exports and imports of the precious commodity and in every case the results have been strikingly positive when it comes to demand and price.

India on Tuesday was the most recent place to report its earnings. The country’s Gem and Jewellery Export Promotion Council provided results for the 2010-11 fiscal year, saying it has had the largest increase in diamond exports in the past three years. The diamond industry is critical to India, which cuts nine out of ten diamonds produced in the world, because it accounts for 16.6 percent of its total merchandise exports.

Total rough and polished diamond exports increased 46.9 percent year-over-year to $43.14 billion, according to GJEPC.

The growth in the sector was primarily driven by polished diamonds, which registered a year-over-year increase of 54.9 percent for FY 2010-11 to $28.25 billion. Polished diamonds accounted for 65.5 percent of the total exports.

The most recent year saw the United Arab Emirates emerge as the largest exporting destination with 47 percent, followed by Hong Kong with 22 percent and the U.S. with 11 percent.

“Today the industry is looking at a staggering growth … the most we have seen in the past three years. India today is looked upon as one of the leading players in the global arena and at GJEPC; we believe that this growth path will continue in the coming year as well,” said Rajiv Jain, GJEPC chairman.

The Israel Diamond Industry recently presented its first quarter results. Net polished diamond exports for the period increased 45.7 percent in value, year-over-year, to $2.1 billion, according to data by Israel Ministry of Industry, Trade and Labor’s diamond controller Shmuel Mordechai. Net rough diamond exports rose 39.6 percent in value to $1.2 billion.

Net import of polished diamonds for the January to March-period rose 24.9 percent to $1.1 billion. Net rough diamond imports increased 48.5 percent to $1.2 billion for the period.

The United States remained Israel’s largest market with 45 percent of total exports ($694 million). Hong Kong accounted for 26 percent ($506 million), Switzerland 9 percent ($351 million), Belgium 8 percent ($190 million), China 2 percent ($63 million) and the rest of the world 10 percent.

The Antwerp World Diamond Centre Diamond Office, which represents the Belgian diamond industry, recently said polished diamond exports in the first quarter rose 30.1 percent in volume to 2.34 million carats, while its value jumped 30 percent to $3.43 billion.
In the January through March period, Belgium exported 34.1 million carats of rough diamonds, a slight decline of 2.1 percent, but in value there was a substantial increase of 29.1 percent to $3.52 billion.
For the same period of 2011, Belgium imported 2.43 million carats of polished diamonds, a 21.5 percent increase for the year, with a 26.2 percent rise in price to $3.20 billion.
The country imported 31 million carats of rough diamonds, a decrease of 2.2 percent on the year, but in financial terms there was an increase of 40.8 percent to $3.38 billion.

United Arab Emirates
The Dubai Diamond Exchange, a subsidiary of the Dubai Multi Commodities Centre Authority and a diamond trading platform, recently reported that total diamond trade volumes for 2010 reached 268.7 million carats, up 50 percent year-over-year, while the value of the precious gem doubled to $35.1 billion.

Polished diamond imports during the twelve months of 2010 rose 88 percent in volume to 90 million carats ($13.3billionn) and polished diamond exports rose 128% to 73.6 million carats ($14.6billionn). Dubai also recorded a 100 percent increase in the volume of total polished diamonds traded, reaching 163.8 million carats.

Rough diamond imports, rose by up to 13 percent during the year recording 50.4 million carats and exports by 3 percent at 54.7 million carats. However, by value, the increase was much more dramatic. The value of rough diamonds imports rose 83 percent to $3.3 billion and rough diamonds exported rose by 81 percent to $3.8 billion. Furthermore, In addition, Dubai’s rough diamond trade increased by 7 percent to 105 million carats, with the value up by 82 percent to $7.1 billion.

Dubai's top trading partners for the year were India, Belgium, Hong Kong and Switzerland, with growing trade emerging from new markets such as Angola and the Democratic Republic of Congo.

De Beers
You may have noticed that in all of these reports there’s a constant theme of dramatic increases in diamond prices, particularly for rough. Varda Shine, CEO of the Diamond Trading Company, the marketing arm of De Beers Group, says the price reflect market conditions and prices for rough will continue to rise through 2011. De Beers, which accounts for nearly 40 percent of the global diamond supply, plans to increase output by 20 percent to 38 million carats this year and raise rough diamond output further to 40 million carats, Shine said in the Business Standard newspaper in India. However, she noted that the there are no new mines ready to come on line that would help meet demand.

She told the publication that growth is and will continue to be driven by India and China. She added that the DTC expects a decline in Japan due to the March earthquake and tsunami but expects demand to increase in the U.S., which is slowly recovering from a deep recession.

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