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DMCC upbeat on long-term diamond industry outlook, despite pressures

DMCC upbeat on long-term diamond industry outlook, despite pressures
Diamond industry is at a major inflection point

Mubasher: The Dubai Multi Commodities Centre (DMCC) said on Tuesday that the diamond industry is facing major pressures, citing a variety of factors, but remained positive on the long-term economic outlook for the sector.

A steady decline in prices, shrinking profitability and tighter access to finance have exerted pressure on the diamond industry, the DMCC said in a report titled “Diamond Changing Forever.”

“Consumer preference is shifting, the supply and demand of rough diamonds is imbalanced, and access to finance is proving increasingly difficult for many traders,” DMCC’s CEO Ahmed bin Sulayem said.

Adding more challenges was the emergence of laboratory-grown diamonds as well as the advent of technological advances, including automated manufacturing and grading.

“The combination of these factors has created a sense of confusion and uncertainty in the market,” bin Sulayem said.

However, the report struck a more optimistic note regarding the long-term economic outlook for the diamond industry, laying out four steps for securing the future of the global industry, namely developing “a new narrative,” refocusing on branding, differentiating products, and surpassing competitors in retail.

The report also highlighted the rapid growth of diamond trade in Dubai, which aims to become the world’s biggest diamond trading hub over the next five years.

Diamond trade in Dubai amounted to just AED 13.2 billion ($3.6 billion) in 2003, but last year, it stood at AED 92 billion, with the Dubai Diamond Exchange (DDE) in Almas Tower alone holding 29 diamond tenders, with a value of AED 1.2 billion.

The DDE hosted one of the largest rough diamond tenders last week, with the total value of rough diamonds sold reaching almost AED 180 million (almost $50 million).

The sold diamonds originated from Africa, comprising more than 500,000 carats from the SACIM mine in the Democratic Republic of Congo (DRC).

“Looking ahead, DMCC will continue to work with partners to drive the diamond sector in Dubai, and positively impact the international diamond trade as a whole,” bin Sulayem added.