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Diamond Demand Reaches Record; Supply Constraints A Worry - De Beers

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.