Diamond prices to head north: DTC

The price of diamond would continue to appreciate steadily in future as demand for the gem is growing rapidly around the world, feels David Lamb, worldwide marketing director, Diamond Trading Company (DTC), which controls about 40 per cent of the worldwide diamond sales.

"Price variation of any commodity depends on the physical demand and supply, and diamond is no exception. The sector is witnessing no tightness of supplies as we continue to explore new mines for smooth availability of roughs," Lamb said.

In the most recent past, the prices went up marginally due to higher sourcing, cutting and polishing charges.

Commenting on the supposed negative impact of the movie "Blood Diamond", which was released on December 8, Lamb said that the consequence was, in fact, other way around. "The movie made consumers aware of the pains behind producing every piece of diamond, and we would have no long-term impact on our sales", Lamb said. He, however, did not deny limited impact on the current sales.

"With diamond sales, DTC wins the heart of consumers, and irrespective of issues involved with it, consumers want to spend on the precious gift of nature. There has been no change in consumers' behaviour," Lamb said.

DTC allocated $220 million on advertising worldwide and Rs 50 crore in India for its brands that include Forevermark, Gift-a-diamond, Diamond Vivaha Jewellery etc. Talking about stiff competition from synthetic diamond and colour gemstones, Lamb said the beauty of natural diamond could not be produced in a factory.

Diamond sales has witnessed 25 per cent growth last year in floral sector and 74 per cent in Diamond Vivaha jewellery due to innovative designs and outstanding polish.

India has special focus in DTC's plans due to rising income of average middle class, and therefore, the company has registered 37 siteholders, highest number countrywise, out of 93 worldwide.

Branded jewellery contributes about 10 per cent of total diamond jewellery sales in the country and is witnessing a phenomenal growth rate of 30-40 per cent y-o-y. DTC expects the momentum to continue in future as well.

The country replaced Italy as the third largest diamond jewellery consumer, only after the US and Japan, with an average growth rate of 24 per cent in 2003, 20 per cent in 2004 and 19 per cent each in 2005 and 2006. Lamb, however, estimated the growth to decline to 15 per cent in 2007.

DTC's Indian arm generated a sales turnover of Rs 7800 crore with a growth of 25 per cent from the last year.