Diamond prices may touch record
highs in coming months By Kevin Skinner
Diamond prices are expected to hit new
highs over the next 12 months, as the divide between
supply and demand widens.
Prices would increase by up to 10% over the next year, as
the industry attempted to balance the market,
said respected international diamond expert, South African-based
James Allan, of Allan Hochreiter finance group.
At current production prices, that would equate to a rise
of about $9 to about $99 a carat.
If you are actively involved in the production and
sales of diamonds, the future looks extremely bright,
said Allan, who was the opening speaker on Tuesday at the
2007 Paydirt World Diamond Conference in Perth.
Global diamond sales reached $72 billion in 2006
an increase of six percent, he said.
That is being driven by the US, which accounts for
about 43% of sales, but there are some new trends appearing.
In China about 40% of Chinese women are now getting
married with diamond rings, and that trend is expected to
increase significantly over the coming years.
India is a rapidly strengthening sector with a growth
rate of 26 per cent last year and that will continue.
Further, with the weakening US dollar diamond demand
tends to pick up in other countries.
So as demand increases and supply decreases, the market
will balance itself by sharp increases in the price of diamonds
from next year through to 2015.
Allan predicted the supply decline in many of the worlds
major diamond producing countries would continue, with Botswana
production expected to lose about $460m in production; Russia
$260 million and South Africa $160 million between 2005 -
2015. - Kevin Skinner