The forecasted increase in diamond prices is now beginning to materialize.
Diamond prices, both rough and polished, have risen 50 percent since July 2010 and are expected to continue their upward trend in value by 20-25 percent in the coming year.
De Beers, the largest miner of diamonds in the world, has exhibited higher production which does not seem to be relaxing the increase in prices.
The demand for these precious stones is a direct result of the rising demand from American and Asian markets. Both regions are experiencing a recovery from the global economic crisis.
De Beers diamond production is set to increase by nine million carats. The diamond giant has reported an approximate 31 million carats in 2010 and is aiming to reach the 40 million carat mark in 2011. The increase will be a significant one considering that the year 2009 brought in 24.6 million carats.
The unstable global economy did not encourage diamond sales in 2009 and resulted in particularly low demand which prompted De Beers to cut their production so as to not accrue a surplus of rough diamonds. Since De Beers controls about 45 percent of the world’s diamond supply, the cut in rough diamonds was significant for the entire industry.
India was especially affected by the cut in supply since about 60 percent of the world’s rough diamonds are processed in the developing country. In 2009, India imported
rough diamonds in the approximate amount of $5.44 billion and this sum as increased significantly in 2010 with imports amounting to $7.37 billion.
De Beers’ production increase is not going to halt rising prices in the processing country since their demand is rising at a steady rate. Indian wedding season is upcoming and traditional gold jewelry is sitting out this season with more attention being given to diamonds and diamond jewelry.
