(Reuters) – Rising demand led by the United States and tighter supplies will boost the diamond market in coming years, but challenges to growth will include access to financing and the need for increased marketing, consultancy Bain said on Tuesday.
The diamond market grew by between 2 and 4 percent in 2013 at every point in the value chain, from mining to cutting and polishing, manufacturing and retail, Bain said.
“Looking ahead to the next decade, the outlook should remain strong, as long as the industry can step up its focus on driving demand and sustaining a positive image for the market,” it said in its fourth annual report on the global diamond industry.
Rising demand in the United States, the top retail market for diamond jewellery, followed by China and India, will drive the rebound of the market following a slowdown triggered by the 2008/9 global financial crisis.
“The economic peaks and valleys that the global diamond market experienced over the last few years are steady, at least for the time being, but the industry cannot afford to get too comfortable,” said Olya Linde, lead author and a Bain partner.
“Macroeconomics, along with other factors – financing, marketing challenges, undisclosed synthetic diamonds, environmental concerns, social awareness, and even country-specific preferences – stand in the way of an easy, straight path to sustained diamond industry growth over the long-term.”
Bain anticipates rough-diamond demand should grow at an average annual rate of 4 to 5 percent over the next decade, in line with historic trends.
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