Dubai diamonds shine bright as first-quarter records $11b trade

Dubai’s diamond industry is truly flourishing as the first-quarter ended on robust note making it evident that the emirate continues to maintain its leading position as a world-leading diamond trade hub.

DMCC announced on Friday that a total of $11 billion (Dh40.4 billion) of rough and polished diamonds were traded in the UAE in Q1 this year, up 36 per cent from the same period in 2021.

The significant growth was led by an 80 per cent increase in the value of polished diamonds traded, which reached $4 billion (Dh14.7 billion) for the quarter.

“After announcing that the UAE became the world’s largest rough diamond trade hub at the Dubai Diamond Conference earlier this year, DMCC stated that it was swiftly growing in polished trade as well,” said Ahmed bin Sulayem, executive chairman and chief executive officer, DMCC.

“The 80 per cent increase in the value of polished diamonds traded in the UAE in the first quarter of 2022 clearly demonstrates robust market conditions. Through DMCC’s world-class facilities and services, along with a hyper-connected business environment, Dubai’s diamond industry is truly flourishing across the board,” added Sulayem.

Growth in polished diamonds demonstrates Dubai’s ability to become a major polished diamonds distribution hub. The rough segment also saw strong growth in Q1, with a 20 per cent year-on-year increase to $7 billion (Dh25.7 billion). Trade flows from Africa and Europe accounted for over 96 per cent of the UAE’s rough trade in Q1.

Karim Merchant, chief executive officer and managing director of Pure Gold Jewellers, said: “Dubai’s diamond is flourishing owing to its leadership’s vision, proactive steps and stringent compliance of the Diamond trade has added to its leading status in the world. The industry benefits from business-friendly policies, ease of doing business, and geographical connectivity too.”

In line with its mandate to attract, facilitate and drive new trade flows through Dubai, DMCC has played a vital role in establishing the emirate as a leading global hub for the diamond trade. DMCC’s Dubai Diamond Exchange is the largest diamond tender facility in the world and home to over 1,150 diamond companies, providing members and industry professionals with state-of-the-art infrastructure, facilities and services to trade with confidence.

“Dubai is the main player and the largest trader globally in rough diamonds and the growth can be attributed to factors such as better KYC/AML procedures and more importantly people trusting Dubai’s reputation of business and commerce. Traders and buyers trust Dubai’s diamond industry because they know they will receive what they pay for and that is very important to maintain its integrity. Growth has also come from the move from traditional areas of investment to alternative investments such as gold and diamonds. More retailers are also seeing a re-emergence of diamond encrusted jewellery as fashionable items which was slow during the pandemic,” said Nick Patel, founder and director at Bank of Bullion.

Dubai boasts direct flights to other diamond hubs across the world, including mining countries in Africa, traders in Israel, and manufacturing centres in India, resulting in a connected supply chain with Dubai at its centre. Additionally, Dubai is home to the two Kimberly Process (KP) offices in the UAE, making the emirate the only entry point for rough diamonds in the country.

The diamond industry in Dubai has been flourishing on two fronts diamond jewellery sales and rough and polished diamond trading with the trade in rough and polished diamonds thriving in the emirate.

“While other countries were in stringent pandemic-induced lockdowns, the Dubai market remained largely open and functional. This provided traders from key markets like India, Russia and Africa a middle ground to trade in the precious stone. The UAE’s relative ease of setting up and running business remains a draw for miners, traders and manufacturers to set up shop in Dubai. The flourishing diamond industry can be credited to the UAE’s successful management of the Covid-19 pandemic. This is especially visible in Dubai’s bustling Gold Souq which is heavily reliant on tourism from western and Asian markets for a majority of their sales. Tourists from across the world prefer buying jewellery in Dubai, due to its wider range and competitive pricing,” said Kaushal Jaysukh Bhai Makwana, managing director at Aura Gems & Jewels.

“VAT returns offered to tourists are another main draw. This makes the UAE one of the few tax-free markets in the world to purchase jewellery. Resurgence in tourism along with a burgeoning local market buoyed by an economic renaissance in the UAE fuelled by a rising population, record real-estate market and rising crude oil prices has led to an increase in diamond jewellery sales overall,”added Makwana.

The diamond industry suffered during the Covid-19 crisis due to lockdowns, travel restrictions and economic uncertainty, yet it fared better than the personal luxury market, informs Renu Manjunath, founder, LabelRM, who runs her line of designer costume jewellery, LabelRM.

“Although demand for diamond jewellery became more localised due to travel restrictions, as the world opened up, it returned as consumers continued to value diamond jewellery as a desirable gift and a key element of marriage. Ongoing surveys show people intend to spend the same amount or more on diamond jewellery than they would have before the pandemic. This indicates a strong, ongoing emotional connection with the diamond story; Dubai aspires to maintain its position as the city of gold and diamonds and a strategic hub for the trade of these precious goods,” concluded Manjunath. — sandhya@khaleejtimes.com