Is the diamond trade booming?
Diamonds were among the top 3% of most traded products in 2020. They are a symbol of eternity, beauty, and quality. Diamonds are also the strongest substance known to man; nothing else even comes close. Diamonds have many industrial uses because of their unique properties. Yet, the diamond import export data suggests that there are some major issues threatening its trade value.
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Diamonds have always been highly valued because of their visual appearance. They have been treasured by many cultures and have had a few significant sources throughout history. While diamonds are synonymous with quality and value today, they first became popular in India, just after the 4th century. India was a great source of diamonds during that era, after which, Brazil became a major supplier up until the 1800s.
In 1866, a huge diamond reserve was discovered in Kimberley, South Africa. De Beers Consolidated Mines Limited, which later became a prominent diamond supplier, was set up in 1888 in South Africa. By the year 1900, De Beers commanded about 90% of the world’s rough diamond production.
Today, Russia is a major source of naturally mined diamonds.
According to the latest diamond export data, India is the world’s largest cutting and polishing center for diamonds. Low cost of operation, ample high-skilled labor, and cutting-edge technology have allowed it to become so. Belgium’s Antwerp district has also been a hub for the diamond-cutting trade since the 15th century. It produced an important polishing tool, called the scaif, that has transformed the industry.
On the other hand, it was the UAE’s free trade policies that made Dubai a hub for gold and diamond trading. Diamonds in Dubai are about half as cheap as in international markets. While the US doesn’t have enough diamond production to justify its exports, it hosts a vast market for finished diamond products. It owes its exports to refurbished, recycled diamonds, or ones resold at higher prices. Lastly, Israel’s diamond industry has also its roots in history. It suffered greatly during the second world war era, though has recovered since.
Top exporting countries (2020)
- India ($16 billion)
- Belgium ($8.86 billion)
- United Arab Emirates ($7.69 billion)
- United States ($6.65 billion)
- Israel ($5.77 billion)
UAE, Belgium, and India import huge amounts of rough diamonds for cutting and polishing. The diamond import data also tells us that India, Hong Kong, and the US import finished products for their massive consumer populations. Diamonds are deeply rooted in the history of countries like India, Belgium, and Israel. It is a legacy industry with generations of jewelers. UAE, the US, and China have made economic and policy decisions to promote their own consumer markets.
Top importing countries (2020)
- India ($26.3 billion)
- United States ($20.2 billion)
- Hong Kong ($15.4 billion)
- Belgium ($11.5 billion)
- United Arab Emirates ($10.1 billion)
What’s in store?
Russian mining companies have been a major diamond source in the past few decades. Diamond trade has been heavily impacted by sanctions on Russia. Belgium and India have evaded imposing sanctions against Russia until now, but continue to face global pressure. Sourcing and production awareness are increasingly affecting consumer behavior.
Also due to a slacking global economy the demand for this commodity is currently reducing overall. Many people prefer to avoid luxurious purchases in face of dire economic situations. Conventional mining of this rare product is also becoming increasingly uneconomical.
Due to the inherent challenges of traditional mining and developments in research and technology, artificial diamonds are becoming increasingly viable. We can expect to see a huge demand for artificial diamonds in the future.