Dubai’s Diamond Trade Sparkles With 12% Growth in First Half of 2024

Dubai’s diamond trade saw a brilliant 12% growth in the initial half of 2024, as the emirate reinforced its dominance in the global diamond market. This upsurge is part of a continuing trend, bolstered by Extensive Economic Partnership Agreements that allow improved market access, particularly into Asian and African territories. Dubai has consistently been recognized as the leading hub, trading over 120 million carats, while the UAE accounts for nearly half of the world’s polished diamond trade value. Technological innovations like blockchain for transparency and the rise of lab-grown diamonds are shaping future dynamics. Dubai Diamond Week will amplify these successes.

Main Highlights

• Dubai’s diamond trade is projected to exceed $40 billion in 2024, reflecting a 12% volume growth.
• Nearly 120 million carats of diamonds were traded in the first half of 2024.
• The Dubai Diamond Exchange welcomed 1,023 new members in the first half of 2024.
• Dubai remains the largest global hub for rough diamond trade since 2021.
• Dubai’s diamond trade contributes over 5.5% to the UAE’s non-oil trade.

Dubai’s Dominance in Diamond Trade

Dubai has solidified its position as a preeminent leader in the global diamond trade, with recent data highlighting its impressive growth trajectory. The emirate’s diamond market dynamics showcase a robust expansion, with total diamond trade reaching $38.3 billion in 2023, marking a 2% year-on-year increase. This growth is not merely a statistical increment but a reflection of Dubai’s strategic positioning as a global diamond hub. Trade volume fluctuations reveal a significant surge in polished diamond trade, which grew by 32% year-on-year to $16.9 billion, underlining Dubai’s influential role in the international market. Moreover, the UAE’s dominance, accounting for 44% of the total trade value in polished diamonds, is a confirmation of its strategic leadership and advantageous geographical location.

This position allows seamless trading between diamond-producing nations and consumer markets, further enhancing its appeal. The consistent rise in rough and polished diamond shipments indicates a well-orchestrated market strategy that capitalizes on global demand and local expertise. As the world’s largest rough diamond trade hub since 2021, Dubai continues to utilize its unique market characteristics, ensuring its status as a pivotal player in the diamond trade industry. The DMCC’s initiatives are focused on replicating this success in other commodities, further diversifying Dubai’s market influence. In 2024, Dubai saw a 12% increase in diamond trade, further cementing its role as a leader in this sector.

Key Trade Agreements and Expansion

Dubai’s strategic focus on reducing trade barriers and expanding market access through Extensive Economic Partnership Agreements (CEPA) has enhanced its global diamond trade position. These agreements facilitate the UAE’s ambitions for trade diversification and non-oil economic growth, aiming for substantial increases in non-oil trade and exports by 2031. Moreover, the expansion of the DMCC and the Dubai Diamond Exchange (DDE) underscores Dubai’s commitment to strengthening global partnerships and attracting diverse business ventures, further solidifying its role as a central hub in the diamond market. The UAE’s projected diamond trade is expected to exceed $40 billion in 2024, reinforcing the nation’s status as a major player in the industry. The UAE experienced a rise in diamond trade volumes via DMCC’s Dubai Diamond Exchange, with a 12% year-on-year increase in trade activity.

Strategic Market Access

The dynamic landscape of the diamond trade is greatly influenced by strategic market access through vital trade agreements and expansion efforts. The Extensive Economic Partnership Agreements (CEPA) in Dubai significantly enhance market entry and trade facilitation, providing access to a wide range of markets in Asia and Africa. These agreements not only bolster non-oil trade to AED 4 trillion and aim to boost exports to AED 800 billion by 2031, but they also propel the UAE’s foreign trade agenda forward, improving its strategic trade partnerships and fostering sustainable economic growth.

The Dubai Multi Commodities Centre (DMCC) is essential in facilitating market access. By operating the largest diamond tender facility globally and hosting over 1,300 diamond companies, it encourages investment and supports economic diversification. The strategies employed here include using free zones for efficient trade operations and offering high-performance business services, ensuring that Dubai remains a vital hub for diamond trade. In addition, the UAE’s leadership in the Kimberley Process reflects its commitment to preventing conflict diamonds and promoting ethical trade.

• Market Entry: CEPA agreements provide access to new markets.
• Trade Facilitation: Free zones streamline trade processes.
• Investment Encouragement: DMCC attracts global diamond companies.
• Economic Diversification: Supports wider industrial growth.
• Sustainability: Emphasizes responsible and sustainable trade practices.

Barriers Removal Efforts

Amidst the robust growth of the diamond trade, the removal of trade barriers through strategic agreements is essential for enhancing market access and expanding global reach. The UAE’s Extensive Economic Partnership Agreements (CEPA) program notably contributes to trade facilitation and market integration, consolidating trade and investment relations worldwide. By facilitating expansion into new markets across Asia, Africa, and beyond, CEPA diversifies supply chains and creates ample opportunities for the private sector, which is critical for driving the UAE’s diamond trade forward. Extensive trade agreements are instrumental in dismantling barriers, thereby enhancing access to burgeoning markets and fostering continuous growth in the UAE’s diamond trade industry.

This strategic removal of trade impediments not only propels the diamond trade to potentially exceed $40 billion in 2024 but also supports the achievement of broader economic sustainability and diversification goals. The diamond trade, representing more than 15% of global shares and contributing over 5.5% to the UAE’s non-oil trade, benefits immensely from such agreements. Furthermore, as the UAE assumes leadership roles, including chairing the Kimberley Process, these agreements underscore the nation’s commitment to responsibly integrating into the global market, ensuring resilient and sustainable industry growth. As the UAE continues to rank third globally in the diamond trade after India and the US, it solidifies its position as a key player in the international market.

Global Partnership Expansion

Building upon the successful removal of trade barriers, the UAE’s diamond trade is now advancing through strategic global partnerships and key trade agreements. The Extensive Economic Partnership Agreements (CEPA) stand at the forefront, enhancing trade alliances and regional cooperation by opening market access across Asia and Africa. Dubai’s rise as a major player in the diamond industry is exemplified by its surpassing of Belgium as the largest rough diamond trading hub, further cementing its influence in the global market. As the UAE prepares to chair the Kimberley Process for the second time in 2024, it underscores its commitment to sustainable and responsible diamond trading, bolstering the industry’s long-term resilience.

The UAE’s foreign trade agenda is actively diversifying supply chains and fortifying global trade relations. The diamond sector, pivotal in this strategy, has witnessed remarkable growth, with trade volumes reaching significant heights. This progress resonates through several strategic initiatives:

• CEPA’s ambitious goals: Aims to drive non-oil trade to AED 4 trillion by 2031.
• Leadership in the Kimberley Process: Reinforces UAE’s dedication to ethical diamond trade.
• Dubai Diamond Week 2024: Fosters dialogue and partnerships within the diamond industry.
• DMCC’s pivotal role: Strengthens Dubai as a global hub for diamond trade.
• Economic diversification focus: Raises the diamond trade’s contribution to UAE’s GDP.

Through these robust partnerships and strategic initiatives, the UAE fortifies its position as a leader in the global diamond market.

Challenges in the Diamond Market

Steering through the complexities of the diamond market today requires addressing a myriad of challenges that impede both supply and demand. Supply constraints are a significant concern, with diamond production declining due to the maturation of existing mines and a lack of new findings. Most importantly, the global diamond supply is projected to stay at historically low levels, limiting availability. With major mining operations like the Diavik mine in Canada nearing the end of their operational life, the pressure on production continues to mount.

This scarcity is coupled with shifts in consumer preferences, especially as younger generations exhibit caution in luxury spending. The average engagement ring budget has significantly decreased, indicative of a broader trend where consumers prioritize different values.

Moreover, the rise of synthetic diamonds is reshaping market dynamics, challenging traditional perceptions of luxury. The allure of lab-grown alternatives, driven by technological innovation, appeals to Millennials and Gen Z for their cost-effectiveness and personalization potential. This trend is reflected in Dubai’s significant growth in synthetic diamond trade, highlighting a shift in consumer spending habits. The emerging market of India is also playing a crucial role in this transformation, as it rises to become the second-largest diamond market, surpassing China.

The diamond industry, consequently, faces the dual task of managing dwindling natural supplies while simultaneously adapting to evolving consumer desires. As market players navigate these challenges, the focus remains on sustaining consumer interest and stabilizing prices amidst fluctuating demand.

Highlights of Dubai Diamond Week

Dubai Diamond Week 2024, held from November 11 to 15, emerged as a pivotal event for the global diamond industry, drawing stakeholders from across the globe to address contemporary challenges and investigate future opportunities.

The event unfolded with the Dubai Diamond Conference, under the theme “Thriving Under Pressure: Steering the new global paradigms,” which highlighted the diamond industry’s resilience amid global shifts. A key focus was the integration of sustainable practices in response to shifting consumer preferences and the growing competition from lab-grown diamonds. The conference, organized by DMCC, served as a platform for global industry experts and business leaders to discuss trends and challenges, reinforcing Dubai’s commitment to sustaining its position in the global trade. With nearly 120 million carats traded in the first half of 2024, Dubai demonstrated its significant role in the diamond market.

The week featured:

• Jewellery, Gem & Technology Dubai (JGT Dubai), showcasing cutting-edge jewellery designs and creative technologies.
• UAE Kimberley Process Plenary Session, emphasizing compliance and traceability to guarantee ethical sourcing.
• VIP speakers, including UAE Minister HE Dr Thani Bin Ahmed Al Zeyoudi and De Beers Group CEO Al Cook, who shared insights on industry collaboration.
• Over 400 exhibitors from 25 countries, underscoring a robust platform for global industry collaboration.
• JWA Dubai awards ceremony, celebrating leaders who drive creativity and uphold sustainable practices.

Dubai Diamond Week 2024 strategically bolstered Dubai’s position as a global hub for diamond excellence, fostering partnerships to guide future challenges.

DMCC’s Role in Growth

As the curtains fall on Dubai Diamond Week 2024, attention shifts to the pivotal role of the Dubai Multi Commodities Centre (DMCC) in propelling the emirate’s diamond trade growth. The DMCC’s initiatives have positioned Dubai as a global diamond trading hub, showcasing its $38.3 billion trade in 2023. This growth is deeply intertwined with the DMCC’s strategic expansions and collaborations with international diamond centers, enhancing Dubai’s market position and contributing notably to its economic impact. Notably, Dubai is recognized as one of the top diamond trading centers globally, further cementing its status in the international market.

DMCC’s ecosystem fosters innovation, supporting over 1,300 leading diamond companies. The 32% surge in polished diamond trade in 2023 and a 62% rise in rough lab-grown diamond trade further underscore its economic influence. By driving foreign direct investment and hosting critical industry conferences, DMCC guarantees a sustainable future for Dubai’s diamond sector.

Emerging Trends and Innovations

In the rapidly evolving landscape of Dubai’s diamond trade, the rise of lab-grown diamonds marks a significant shift, with a remarkable 51% annual increase highlighting their growing market influence. Technological advancements such as blockchain technology and AI-driven laser micro-machining improve transparency and efficiency, ensuring authenticity and traceability throughout the supply chain. Furthermore, the industry’s pivot towards ethical sourcing, driven by consumer demand and regulatory pressures, underscores a commitment to sustainable practices, reshaping traditional market dynamics and fostering trust among stakeholders. Dubai’s strategic location, acting as a bridge between Africa and India, further enhances its global connectivity, reinforcing its position as a central hub for diamond transactions. Dubai’s strategic location between major diamond sources and processing centers boosts its competitive edge, making it a formidable player in the global diamond market.

Rise of Lab-Grown Diamonds

The increasing prominence of lab-grown diamonds marks a transformative shift in the global diamond industry, driven by technological advancements and consumer demand for sustainable alternatives. As the market is projected to grow from $23.3 billion in 2023 to $25.68 billion in 2024, the sustainability impact of lab-grown diamonds has become a key factor influencing consumer preferences. These stones offer an environmentally friendly and ethical choice for discerning buyers, aligning with the growing global emphasis on sustainable practices. The Asia-Pacific region stands out as the largest market in 2023, reflecting its significant influence on production capabilities and consumer adoption trends.

• Projected Market Growth: The lab-grown diamond market is expected to reach $35.97 billion by 2028, highlighting its robust expansion.
• Regional Influence: The Asia Pacific region leads the market with a significant share, attributed to production capabilities and technological advancements.
• Innovative Collaborations: Companies like Diamond Foundry are expanding through strategic partnerships, such as establishing a factory in Spain.
• Quality Improvement: Advances such as Adamas One Corp.’s high-quality colorless diamonds are improving market appeal.
• Consumer Demand: There is a rising demand for synthetic stones, driven by affordability and quality. The global lab-grown diamond market was valued at $22.79 billion in 2023, underscoring its substantial presence and potential for future growth.

This growth reflects a broader trend in consumer behavior, where preferences are increasingly aligned with ethical and sustainable sourcing, setting the stage for a new chapter in the diamond industry.

Technological Advancements in Transparency

Amid the evolving landscape of the diamond industry, technological advancements in transparency are emerging as a critical focus. The integration of blockchain technology stands at the forefront, offering a revolutionary approach to improving supply chain transparency. The Dubai Multi Commodities Centre (DMCC) is advocating for the establishment of globally recognized standards to guarantee the integrity and sustainability of the diamond supply chain. The adoption of an interactive ledger is one such solution that can provide thorough tracking capabilities. De Beers has pioneered with Tracr, a blockchain-based tracking mechanism capable of monitoring over two-thirds of its diamond production by value. This innovation improves traceability and bolsters consumer trust by guaranteeing that diamonds are ethically sourced. As the G7 sanctions against Russia highlight the need for stricter regulations, the emphasis on globally recognized standards becomes increasingly pertinent.

The U.S. sanctions on Russian diamonds initiated in early 2022 have further catalyzed the industry’s focus on supply chain transparency. Furthermore, the G7’s potential requirement for digital supply-chain evidence for diamonds 0.5-carat and larger underscores the growing demand for rigorous transparency measures. The Future of Trade report emphasizes forming working groups to create baseline tracking and transparency standards. Such industry-specific standards are crucial to address concerns related to potential delays and costs.

Shift to Ethical Sourcing

As consumers prioritize transparency regarding diamond origins, the industry is being nudged toward adopting sustainable practices. This transformation is evident as ethical certification and social responsibility become key factors influencing purchasing decisions. Consumers are not only interested in the aesthetic value of diamonds but also in their ethical expedition. Gold Rush Denver, which actively participates in the ethical diamond movement, is an example of a brand aligning with these evolving consumer preferences.

• Transparency and Traceability: The call for transparent supply chains is answered with blockchain technology, enhancing traceability from mine to market. Companies are increasingly using certifications from organizations like GIA, IGI, or HRD Antwerp to provide third-party assurance of ethical sourcing.
• Lab-Grown Diamonds: These are gaining popularity as sustainable alternatives, offering the allure of diamonds without ethical concerns.
• Fair Labor Practices: Emphasis on safe working conditions and fair wages is reshaping mining practices, guaranteeing ethical sourcing.
• Environmental Conservation: Eco-friendly mining techniques are prioritized to minimize environmental impact, aligning with sustainable values.
• Ethical Certifications: Standards like the Kimberley Process and Fair Trade guarantee conflict-free and responsibly sourced diamonds.

This shift towards ethical sourcing not only satisfies consumer demands but also propels the diamond industry into a future where freedom and responsibility go hand in hand.

Frequently Asked Questions

How Does Dubai’s Diamond Trade Impact Local Employment Opportunities?

Dubai’s diamond trade substantially impacts local employment opportunities, fostering job creation and skill development. The trade’s expansion attracts businesses, facilitating economic growth and offering individuals the freedom to pursue careers in a dynamic, globally-influential industry.

What Measures Ensure Ethical Sourcing in Dubai’s Diamond Industry?

Dubai’s diamond industry weaves a tapestry of ethical sourcing through the Kimberley Process, ensuring conflict diamonds are banished. Blockchain technology illuminates transparency, empowering consumers with freedom of choice in a market committed to responsible and sustainable practices.

How Has Consumer Interest in Lab-Grown Diamonds Affected Traditional Diamond Sales?

Consumer preferences for lab-grown diamonds, driven by their popularity due to affordability and ethical appeal, have notably impacted traditional diamond sales. This trend challenges the conventional market, prompting a strategic shift towards embracing lab-grown alternatives.

What Role Does Dubai Play in Global Diamond Pricing?

Dubai plays a pivotal role in global diamond valuation, establishing the foundation for transparent pricing. Its strategic position, competitive policies, and market influence allow industry players to navigate freely through the complexities of diamond pricing dynamics.

Are There Any Tax Incentives for Diamond Companies in Dubai?

Dubai offers enticing tax benefits for diamond companies, including zero corporate tax and VAT exemptions on specific products. Adherence to diamond regulations guarantees compliance, while the business-friendly environment fosters growth and encourages global investment in the sector.

Our Concluding Thoughts

Dubai’s diamond trade has experienced a notable 12% growth in the initial half of 2024, underscoring its dominance in the global market. Strategic trade agreements and the Dubai Multi Commodities Centre’s pivotal role have facilitated this expansion. However, challenges persist in the form of market volatility and ethical concerns. Dubai Diamond Week highlighted emerging trends and innovations, setting the stage for future developments. The question remains: will Dubai maintain its momentum, or will unforeseen challenges disrupt this glittering trajectory?

Andrew Wilson

Andrew Wilson is a seasoned writer specializing in the jewellery industry and news. His career began in the newspaper industry, where he honed his reporting skills and developed a keen eye for detail, laying the foundation for his meticulous research in later writing endeavors. Transitioning into marketing, Wilson gained valuable insights into consumer behavior and market trends, enriching his understanding of the jewellery industry when he embraced full-time writing about 15 years ago. In 2019, he discovered a passion for jewellery writing, focusing on market trends and innovative designs. A member of the International Gem Society, Andrew's work is characterized by thorough research and accuracy, offering comprehensive insights into the jewellery world. He occasionally adopts pseudonyms to cater to different audiences and business needs, serving a diverse clientele, including numerous jewellery businesses. Recognized for his unique blend of industry knowledge, research prowess, and engaging writing style, Wilson is dedicated to demystifying the jewellery industry, making it more accessible and understandable to both enthusiasts and professionals.