Home » News » Business » Demand for rough diamonds remains imbalanced - report

Demand for rough diamonds remains imbalanced - report

Publishing Date : 09 December, 2019


A combination of factors continue to affect the supply and demand of rough diamonds across the globe creating a sense of confusion and uncertainty in the market.

This is an analysis contained in a new report published this week by the Dubai Multi Commodities Centre (DMCC) titled; 'Diamonds Changing Forever'.

It said due to the above factors, the global diamond industry was in need of a new narrative and rebranding to secure its future.

"Consumer preference is shifting, the supply and demand of rough diamonds is imbalanced, and access to finance is proving increasingly difficult for many traders," the latest DMCC report reads.

It adds; "Furthermore, advanced technology and automation has ushered in a new wave of disruptive change that has challeneged traditional business models. 

The combination of these factors has created a sense of confusion and uncertainty in the market."

It said diamond prices were also steadily decreasing while profitability is in decline and access to finance is restricted, placing the industry under significant pressure.  According to DMCC, the value of polished diamonds sold as jewellery since 2011, decreased by 13 percent.

The report also highlights how automated manufacturing is set to drastically change the supply of diamonds.

"Technology makes it possible to take a mined diamond today, cut, and polish it, set it in jewellery and sell it to a consumer on the same day."

According to DMCC, a new technology is also in the final stages of development, which will reduce the time it takes to make accurate and consistent assessments.  These developments would sharply reduce production times and DMCC believes that the shorter period would translate into lower inventory, lower bank financing and lower costs.

This, according to DMCC, would also remove polished diamonds price distortions caused by stocking and destocking.

The report further highlights that in order for laboratory grown diamonds (LGDs) and the main diamond industry to survive, the two must coexist, embrace innovation, harness technology and to focus on the customer.

The report went on to predict that LGDs were unlikely to find their niche and that will be to the detriment of the whole industry.


The report then identifies four necessary steps the international diamond industry should take collectively in order to secure its future.  The four steps proposed by DMCC are; 'Refocus on branding, Differentiate the product, Develop a new narrative and Surpass competition in retail.'

"The new narrative should show new consumers that each natural diamond is inherently unique, while demonstrating the long-lasting benefits to local communities.

"Many of the diamond-related brands launched over the past few decades are in fact simply logos.

Having a brand represents a promise that is both exclusive and desirable.  The industry needs to further establish brands that do not just sell jewellery, but sell emotional connections.

"Many of today's jewellery retailers are simply selling an increasingly commoditised version of crystallised carbon.  In doing so, they end up fighting a pricing war to survive and causing consumer confusion," the DMCC states.

As part of its recommendations in the report, DMCC said retailers had to offer more than a place to purchase jewellery.  The retailers were advised on the need to provide a community and a unique purchasing exprience.

The retail environment, according to DMCC, had been slow to adapt to the wider retail environment, particularly given the rise of e-commerce.



Do you think the courts will help put the UDC, BMD impasse within reasonable time ahead of the 2019 General Election?