Part 1: KPCSC gives insight into illegal diamond mining, trading in Africa

Although the diamond watchdog Kimberley Process (KP) prides itself for significantly reducing the flow of conflict goods since its establishment in 2003, the Kimberley Process Civil Society Coalition (KPCSC) alleged that illegal diamond...

18 october 2021

The jewelry industry in Russia needs to be upgraded in a serious way

Dina Nasyrova is a vice-president of the International Jewelry Exhibition-Congress J-1 recently hosted by the Atrium of Gostiny Dvor in Moscow. As a partner and the Muse of the famous jeweler Ilgiz Fazulzyanov, she actively participated in the preparation...

11 october 2021

Smiling Rocks, a philanthropic business model, inspires companies to work for betterment of the world

Zulu Ghevriya, the CEO and Co-Founder of Smiling Rocks, Founder of Vedantti Jewellery and Managing Director of Prism Group has been in the diamond and jewellery industry for over 20 years. Zulu started his business, Prism Group, as a natural diamond...

04 october 2021

Work hard and you will find success

Eduard Utkin, Director General of the “Jewellers’ Guild of Russia” Association, expert of the RF Chamber of Commerce and Industry’s Committee on Precious Metals and Precious Stones, told R&P about implementing the SIIS PMPS (State Integrated Information...

27 september 2021

GOLDNET.MARKET - “We want and are working to provide business with the opportunity to develop a lot of activity areas”

Today, almost all jewellery companies have their own wholesale websites, online stores, and social media pages. But a year ago, GOLDNET.MARKET, the first jewellery wholesale marketplace appeared in Russia, a new effective tool for the jewellery market...

20 september 2021

Blessing in disguise: pandemic and a new interest in diamonds

08 march 2021

The period 2020-21 of the global diamond and diamond jewellery industry could be termed as the most trying and arduous ever faced in recent times. When COVID-19 made its appearance, the diamond industry as part of the luxury sector was majorly impacted, due to lockdowns, travel restrictions and other hurdles.

This, in turn, resulted in demand for diamond and diamond jewellery becoming localized which again put a brake on the growth of the industry globally, negatively impacting the economies of most countries.

But, the diamond industry, slowly and surely, returned to a strong position towards the 2020 year-end, bring the much-needed cheers and confidence across global. Though ALROSA’s diamond production in Q4 2020 recorded only 7.1 million carats against 8.8 million carats in 2019, while sales went up to 17 million carats compared with the previous quarter against 8.2 million carats in 2019. For 12 months of 2020, diamond production amounted to 30 million carats against 38.5 million carats in 2019, sales - 32.1 million carats, against 33.4 million carats in 2019. De Beers' fourth-quarter rough diamond output too dropped by 14% to 6.7 million carats, driven by continued planned reductions in response to the lower demand for rough diamonds caused by the Covid-19 pandemic and operational challenges at Orapa, in Botswana that led to lower than expected production.

But the major Miners - De Beers and ALROSA - who had slowed down and cut production, returned with a vengeance and so did the diamond and diamond jewellery manufacturers. Demand picked up in the consuming markets too, and the industry was on ‘return mode’, with sales showing an upturn in the economies with the global retail sector booming.

Diamond and diamond jewellery, which was thought of as the last thing on consumers’ minds during the pandemic, had consumers returning with renewed interest. This saw the retail sector investing in stocking up on diamond jewellery with growing confidence. And, as this rubbed on to the consumers, demand for jewellery too increased multifold, both in physical stores as well as in online platforms across the world.

Happy days were back again… gifting jewellery picked up, engagements and weddings too upped the demand quotient bringing the industry’s retail activities to ‘a festival of sorts all over the globe.

The US, being the largest diamond jewellery market, saw the demand for jewellery and watches reach the highest demand, followed by consumers in China and India. According to reports, consumers in the US, China, and India preferred to buy diamond jewellery for engagements and weddings, with the pandemic not making any changes in their decisions. With unspent extra money on hand, consumers were ready to spend more on diamond jewellery than they would have before the pandemic crisis. So, despite any global misfortunes bringing temporary despair, emotional connections with diamonds are forever, says a media report.

In its efforts to promote diamond/ diamond jewellery worldwide, the Natural Diamond Council (NDC) conducted a diamond desirability research in the final quarter of 2020 among 5,000 respondents between the ages of 18 – 39. The analysis showed diamond jewellery leading as the most highly desired and tangible luxury good. Both Millennials and Gen-Z buy natural diamonds jewellery for themselves and others as gifts. Half of these natural diamond jewellery purchases were made for themselves, which was largely driven by female consumers, says NDC.

NDC claims that while the majority of diamond jewellery purchases globally were mostly centred around a life event or occasion, approximately 25% of purchases were for no specific reason. The organisation also says that the future for fine jewellery purchasing is optimistic as 37% of respondents intend to buy fine jewellery in the next 12 months and 27% expect to receive it.

Media reports also indicated that for the US consumers, the lockdown was a non-issue and they lived their lives buying diamond jewellery daily. The US and Chinese markets particularly registered good jewellery sales due to the holiday period as 2020 came to a close. As per reports, jewellers reported a 10 to 20 per cent increase as compared to the same period during the ending months of 2019.

In China, consumers who faced restrictions on travelling shopped for their luxury goods and diamond jewellery from their local retailers and duty-free stores. Chinese local chains hit double-digit growth in sales during the last few months of 2020. And demand rising due to increasing wealth and income, major retailers undertook expansion plans and opened many outlets in smaller towns across the country. These new consumers in smaller cities are expected to provide continued demand and also drive further growth for diamond jewellery in China. A recent World Gold Council report indicated that though China’s jewellery demand dipped by 35 per cent last year due to pandemic, the jewellery industry hopes for a recovery in the local economy and sustained growth in consumer sentiment in 2021.

In India, the diamond and jewellery industry has picked up momentum, with diamond and jewellery exports increasing to almost pre-covid times. Demand in the jewellery local markets is on the rise too, with the ensuing marriage season expected to increase demand immensely. In addition to numerous virtual jewellery exhibitions organised by the Gem & Jewellery Export Promotion of India, some other organisations are arranging regular exhibitions as well. 

As mentioned earlier, although brick-and-mortar stores still provide the required confidence to consumers globally, the diamond value-chain is becoming digital rapidly. This is attributed to a large group of consumers who are still hesitant to step out to a store, due to fear of catching COVID-19. According to reports, online jewellery business grew 20% in retail sales, with diamond jewellery retailers posting up to 60% to 70% y-o-y sales growth in their online channels. However, 90 to 95 per cent of consumers still like to see and touch jewellery and preferred to buy diamonds in brick-and-mortar stores.

During Q4 2020, the huge demand for diamond jewellery. This resulted in high demand for loose polished stones. This augured well for the cutting and polishing segment globally, registering net exports of cut & polished diamonds by 20% more compared to the same period in 2019. Therefore, the demand for rough diamonds too increased, resulting in 20 per cent increased in rough imports. Finally, the diamond industry was on its way to an earlier time.

At this stage, the major miners like De Beers and ALROSA tapped into their inventories and released about 13 million carats of rough and increase rough prices by 2%–3%... resulting in a 10% sales growth compared with the fourth quarter of 2019. The impetus to forge head began in the year 2021 and the industry returned with confidence to forge ahead. As miners kept a flexible sales policy, buyers were eager to stock up entering 2021, rough diamond sales and price increased with renewed vigour resulting in miners reporting about 8 per cent increase in sales. ALROSA is said it have netted $ 430 million from January diamond sales - $ 421 million for rough diamonds and $ 9 million for polished diamonds. On the other hand, according to Anglo American De Beers had lowered its rough production guidance to between 32 and 34 million carats for 2021 from the previous 33 to 35 million carats. But, reported that it has accrued $650 million from the first sales cycle of 2021 compared to $551 million a year earlier.

Importantly, one also needs to consider the current rise in demand for Lab-grown diamonds globally as well as in diamond consuming local markets. While fashion jewellery retailers are pushing LGD jewellery with much enthusiasm, demand from youngsters is showing an increase too like never before. Price differentiation is also a factor in the rise in demand for LGD jewellery. Also, sustainability is part of younger consumers’ decision on whether they buy diamond jewellery or not. Eventually, the year 2020 ended with strong sales across the whole value chain. According to a report, Lab-grown diamond production reached between 6 and 7 million carats in 2020, with 50% to 60% of it manufactured in China using high-pressure, and high-temperature technology,

In the recent Union Budget, the Indian Finance Minister Nirmala Sitharaman increasing the basic customs duty on the import of cut and polished synthetic diamonds from 7.5% to 15%. This step was taken to support domestic LGD producers and manufacturers. According to industry sources, about 95% of the lab-grown diamonds manufactured in Surat are exported to the United States, and these stones are 60% cheaper than the natural gems. The LGDs sector now stands to boom in India as many businesses are setting up production and cutting & polishing units in the country.

However, if the current crisis is not dealt with head-on, then the industry could enter a worse depression. Analysts predict a full recovery of the global diamond industry only between the year 2022 to 2024. At present, the long-term outlook for the global diamond market looks encouraging, with rough diamond supply growth projected to at least 2% annually, provided the mining production remains steady. Again, this depends on various factors as well, including the end of the pandemic, governments’ support and the most important…a positive response from the end consumer, who is the king.

Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough&Polished