The $60 billion diamond jewelry market may face structural shortages and price increases, particularly for large stones, as demand doubles by 2020, led by growth in China and India, according to consultant Bain & Co.
Diamond demand in carats will rise more than 6 percent a year until 2020, outpacing the 2.8 percent annual growth in supply, Bain said today in a report for the Antwerp World Diamond Centre. Production will reach almost 175 million carats by then, exceeding the peak reached in 2007.
“Even in the most conservative growth scenario, the estimates are clearly very positive,” said Bain, whose forecast is based on a doubling of the middle classes in China and India, which will account for 30 percent of the global market by 2020, the same as the U.S.
Financial speculation may play a role in the anticipated price increase, according to Bain.
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