Diamond Prices Update: Due to the drop in prices in the international market, diamond producing companies have stopped the supply. De Beers, the world’s largest diamond producer, has cut rough diamond supply by 35 percent and polished diamond supply by 20 percent to drive up prices. Russia’s leading diamond company Alrosa has also stopped selling diamonds.
If we look at the reasons for the decline in diamond prices, it is due to the slowdown in the related sectors. The demand for diamond jewelery has decreased in the market. Due to which the prices of diamonds have fallen to a one-year low. People are now giving less importance to buying diamond jewelery than before. Instead of buying these expensive luxury items, people are spending more on travel. China has a large consumption of diamonds. But the weak recovery of the Chinese economy after the pandemic has significantly reduced demand there. In the US, too, people are cutting back on diamond purchases due to inflation and expensive loans. Due to these reasons, the prices of diamonds have decreased.
This is the reason why production companies have restricted the supply of diamonds. Companies will meet production targets by 2023 despite supply cuts. These companies say that they have reduced the supply of diamonds due to weak demand. Demand for diamonds has dropped by 82 percent compared to a year ago. Global economic challenges and conditions have affected the demand for luxury items. Diamond companies want to see an increase in demand as diamond prices rise. However, the long-term outlook for demand growth remains good.
In India too, diamond traders have banned the import of diamonds for two months following a drop in prices. 90% of the world’s rough diamonds are cut and polished in India. The largest diamond producer has banned diamond auctions for November and December.
Russia is the largest producer of diamonds in the world by volume. At the same time, there are fears that the G-7 countries may ban the import of diamonds from Russia to control the supply of diamonds. Russia’s ability to raise funds for its war against Ukraine could be affected. If the G-7 countries take this decision, the supply of diamonds may be affected further.