Increase In Diamond Demand and Decrease in Diamond Supply Is Due To India And China
2005: Increase in Diamond Demand Directly Depends On Middle Class Attitude Toward Diamond
Quoting a noted industry analyst, The Financial Times has concluded that diamond people are in the “right business.”
“Demand for diamonds is booming and the potential of fast-growing markets such as India and China is immense, virtually guaranteeing decades of growth,” the Times writes. “Supply cannot keep up with demand so prices have been rising steadily.”
Here are some facts from the Times’ special section on diamonds in Africa:
- The final figures for 2004 showed an 8% worldwide growth in dollar terms. De Beers managing director-designate Gareth Penny says that’s “staggering for a $7.5 billion industry.”
- India has an annual growth rate of 20 percent. The Chinese market is looking at double digit growth and citizens of such rich cities as Shanghai now have a diamond acquisition rate close to that of the U.S. Even Japan’s market has reversed its years of decline and is showing growth.
- This means the market could grow to $16 billion by 2015.
- On top of this, there has not been a major new find since Ekati in Canada. Argyle is seen as mature, and Venetia in South Africa may be depleted in a decade.
- Picton predicts if no further discoveries are made, there will be a $5 to $7 billion supply gap. “To cover the expected shortfall, you need to find another Botswana or two and even then you could not produce enough in time,” Picton said. “Rough diamond prices will have to rise by 30 percent in real terms.”