Global demand for diamond jewellery reached a record high of $79 billion in 2013, according to the inaugural Diamond Insight Report, published yesterday by The De Beers Group.

Global demand for diamond jewellery reached a record high of $79 billion in 2013, while there is a need to invest in securing new supplies, according to the inaugural Diamond Insight Report, published yesterday by the The De Beers Group.

Sales of polished diamonds in the US rose by seven per cent last year. In India and China, their domestic diamond jewellery markets rose at a compound annual growth rate of 12 per cent in local currency terms from 2008 to 2013.

Such data comes at a time of heightened interest in “real assets” such as jewellery, gold and fine art in the wake of the financial turmoil of 2008, although prices for gold and fine wine have come off recent multi-year highs.

The report cautions that while diamonds continue to attract investors and consumers, future demand levels cannot be taken for granted. The overall category is facing increasingly strong and sophisticated competition from other luxury categories, with diamonds' share of advertising voice in the US market having reduced within its competitive set, the report said.

Global rough diamond production in 2013 increased by seven per cent in carat terms over 2012 levels to a total of around 145 million carats. However, this remains well below the 2005 peak of around 175 million carats, the De Beers report said.

The report also found that China is the world's fastest growing market for diamond jewellery sales, with the number of diamond jewellery retail doors in the country increasing by almost 30 per cent between 2010 and 2013.

Additionally, the Internet has become an increasingly important route for the sector; more than one in six jewellery transactions in the US were made online last year. In China, the Internet is used by a quarter of acquirers to check out items before they buy them.

"Consumer demand remains the one true source of value for the diamond industry. With demand forecast to increase further from 2013's record levels, the opportunity for growth is clear. But this must not be seen as cause for complacency. The industry will continue to lose ground to other categories if it does not invest significantly in production, marketing and technology,” Philippe Mellier, chief executive, De Beers Group, said.