Bhaskar Analysis: Natural diamond prices fall 40% in two years, but trend will change, exports up 14% amid supply slump

Natural diamond prices have fallen 40% in the past two years due to the Ukraine-Russia war. But now this trend is likely to change. Now natural diamonds may become more expensive due to reduced supply against demand. According to Ajesh Mehta, coordinator of the diamond panel at the Gem and Jewelery Export Promotion Council, there have been clear signs of an increase in demand for natural diamonds for the past two months.

Exports of polished diamonds from India rose 14% in August compared to July. GJEPC Chairman Vipul Shah said that the diamond industry is now at a stage where prices will start to rise. The reason for this is the growing demand for diamonds in the international market. World-renowned diamond analyst Paul Jimnisky recently said during the Bharat Diamond Borse Leadership Series that despite the current challenges, the global market of the diamond industry is around $80 billion.

The current situation may seem challenging, but looking at the next 10, 20 and 30 years, the diamond industry has immense potential. Demand will also increase as the global population, middle class area and people's incomes increase. According to the index, prices fell 4.2% in September. Diamonds have become 35-40% cheaper since September 2022. That is, the natural diamond which was available for 1 lakh rupees two years ago has become 60-65 thousand rupees.

These three major reasons can enhance the diamond's luster in the coming days 1. Demand picks up from America-Europe ahead of Christmas: According to Shah, polished diamond prices are stabilizing now. As the festival of Diwali and Christmas approaches, it is expected that the demand as well as the price of diamonds will increase. As has been the trend in recent years, demand for diamonds in the US and Europe has increased a month before Christmas. Polished diamonds are sold more in America. 2. Decline in supply from Israel further supports diamond prices: Biren Wakil, founder of Paradigm Commodity Advisors, said supply of rough diamonds from Israel has decreased. Israel, the world's sixth largest exporter of rough diamonds, is simultaneously fighting a three-front war with Hamas, Hezbollah and Iran. Due to which the supply in the international market has decreased. Due to which the diamond price is getting more support.

After China, India is now the second largest diamond market India has overtaken China to become the second largest diamond market this year. America remains at the first position, while China has now reached the third position. Seeing this, China has started providing stimulus packages to improve consumer sentiment. Apart from that, the Beijing administration has also cut interest rates. Along with this, diamond sales are likely to increase rapidly in China as well as America. The trend will improve going forward.> Paul Zimnisky, Diamond Analyst