China and India, buoyed by their booming new wealthy middle class, will push the combined countries’ diamond market to equal that of the US by 2020.
The US — currently the world’s biggest consumer of diamonds — sucks up almost 50 percent of the world’s diamond supply but it’s share of the market is expected to fall as emerging market demand skyrockets in coming years.
Despite recent black market currency crackdowns in India denting short-term demand, it’s only expected to be a blip for the country’s diamond appetite, though one that could stretch through the first few months of this year and possibly weighing on Valentine’s Day sales.
Global diamond demand break down by major regions in 2015
A global demand slump
Global polished diamond consumption is primarily dominated by demand from the diamond jewellery sector, which reached $79bn in 2015, a decrease of 2.5 percent over 2014.
The fall in demand was mainly due to unfavourable currency movements, and economic slowdowns in China and other emerging markets. An economic slowdown contributed to slow growth in Chinese diamond sales, and weak consumer spending accounted for negative growth in India.
Other markets also saw declines in diamond jewellery sales values, driven by large currency devaluations against the US dollar.
Global demand for diamonds is estimated to remain skewed in favour of emerging markets, specifically China, followed by India because of its new wealthy middle class.
Between 2015 and 2020, global demand for diamond jewellery is expected to record a compound annual growth rate of 6.4 percent.
While global supply of polished diamond is expected to grow at an average of four percent year over the next four years to 163m carats in 2019, resulting in a demand-supply gap of around six percent in 2019.