Dubai: Diamond prices - already on an upward spiral - could jump 30-50 per cent by the end of the year, leading jewellers in Dubai have predicted.
Firoz Merchant, Chairman, Pure Gold Jewellers, which has 100 stores worldwide, said, "Prices have gone up by 50-70 per cent in some areas in the past six months. There is room for another 30-50 per cent increase by the end of the year."
Arun Hendev, Director, Le Brilliante Jewellery at the Dubai Mall and Souk Madinat Jumeirah, felt the upward trend in the Middle East would have to factor in the political unrest as well.
Speaking from Hong Kong, where he was attending the International Jewellery Show, he said, "In the Middle East, I foresee a 15 per cent increase in diamond prices as of now, but it would definitely be higher if the situation improves."
Vinay D. Jethwani of Meena Jewellers, Bur Dubai, who projected a jump of 20-25 per cent, said, "Global supplies are tight and as the world moves out of recession, people are buying again."
Much of the price rise is said to be the direct result of De Beers, the world's largest producer of diamonds, increasing the prices of rough diamonds by over 10 per cent in the past year. The Rapaport Diamond Report, a source of diamond prices, noted that De Beers raised the prices of rough diamonds by seven per cent in February alone this year.
Average global prices of certified polished diamonds have also gone up by 11.3 per cent over the past one year, it said.
"Historically, diamond prices have continuously gone up unlike gold which has its ups and downs," said Jethwani.
The reason, often cited, is the shortage of diamonds, as tapping the world's mining fields could reach saturation. "At the rate at which things are going, diamonds may disappear in another 50 years," said Merchant.
Some, however, believe that the scarcity is artificially created by the world's major diamond traders who buy directly from miners and deal in the secondary market from where small and medium manufacturers purchase rough stones at a premium.