HONG KONG, Sept. 17, 2014 /PRNewswire/ -- Global demand for diamond jewellery reached a record high of US$79 billion in 2013 according to the inaugural Diamond Insight Report, published today by The De Beers Group of Companies.
Demand is expected to continue to grow over the long-term, driven by the ongoing economic recovery in the US (the world's largest diamond jewellery market) and the growth of the middle classes in developing markets such as China and India. Sales of polished diamonds in the US increased seven per cent in 2013, while both India and China have seen their domestic diamond jewellery markets grow by a compound annual growth rate of 12 per cent in local currency terms between 2008 and 2013.
The report cautions that while diamonds retain their special allure with consumers around the world, future demand levels cannot be taken for granted. The overall category is facing increasingly strong and sophisticated competition from other luxury categories, with diamonds' share of advertising voice in the US market having reduced within its competitive set.
Global rough diamond production in 2013 increased by seven per cent in carat terms over 2012 levels to a total of around 145 million carats. However, this remains well below the 2005 peak of around 175 million carats. The report further highlights that a forecast reduction in supply from existing sources will likely not be matched by new production coming on-stream in the years ahead and diamond supply is expected to plateau in the second half of the decade before declining from 2020 onwards.
Meanwhile, as mining moves deeper into the earth and towards more remote locations, the extraction process is becoming increasingly complex and costly. The three principal input costs -- labour, electricity and diesel -- have all seen increases well above local inflation levels in the main diamond producing countries over the last decade and this trend is set to continue.
Substantial investment will be required in diamond production, technology and branding, marketing and retail standards if the industry is to sustain its recent levels of success into the future, the report says.
The report also reveals that:
Philippe Mellier, Chief Executive, De Beers Group, said: "Consumer demand remains the one true source of value for the diamond industry. With demand forecast to increase further from 2013's record levels, the opportunity for growth is clear. But this must not be seen as cause for complacency. The industry will continue to lose ground to other categories if it does not invest significantly in production, marketing and technology."
NOTES TO EDITORS
The Diamond Insight Report 2014 is available for download at: www.debeersgroup.com/insightreport
Video and audio footage of De Beers Group Chief Executive, Philippe Mellier, discussing the Insight Report is downloadable here: www.debeersgroup.com
ABOUT THE DE BEERS GROUP OF COMPANIES
De Beers is a member of the Anglo American plc group. Established in 1888, De Beers is the world's leading diamond company with unrivalled expertise in the exploration, mining and marketing of diamonds. Together with its joint venture partners, De Beers employs more than 20,000 people (directly and as contractors) across the diamond pipeline, and is the world's largest diamond producer by value, with mining operations in Botswana, Canada, Namibia and South Africa. As part of the company's operating philosophy, the people of De Beers are committed to Living up to Diamonds by making a lasting contribution to the communities in which they live and work, and transforming natural resources into shared national wealth. For further information about De Beers, visit www.debeersgroup.com.
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