If the last years were those of gold, the decade to come will be the years of the diamond, with demand outgrowing production twice as fast, said a report by top consultancy Bath and Company.

The demand for diamonds will reach 247 million carats in 2020 compared to the current 175 million carats, added the report.

The three main production companies of rough diamond - De Beers (South Africa), Rio Tinto Zinc (Canada) and Alrosa (Russia) - agree to say that the market for rough diamond was nearly on balance in 2010 with a demand equivalent to the production of about 135 million carats.

The world production increase will not be enough to fill the raising appetite of China, India, the Gulf and soon of Brazil for precious stones and more particularly for diamond, the report said.

The prices are thus going to grow inexorably, it added.

Sergey Vybornov, president of the Alrosa Company, has confirmed this tendency by considering the explosion of the demand in China and in India (in China because of the fast development of the middle class and the number of millionaires pulling the expansion of the new markets for luxuries).

To these markets a strong demand has to be added for the US, the Golf and, in the years to come, the one to be foreseen in the emerging countries of Latin America like Brazil.

The price of rough diamonds increased by 29 per cent in 2011. Consequently the price of cut diamonds is set for a sharp increase.

De Beers is betting on a diamond shortage and might consequently plan to reduce their production to extend the life lasting of their diamond mines, a statement said.

The impact on the prices would be immediate particularly for the upper quality stones which are mostly investment diamonds, it added. – TradeArabia News Service