Daily Times

For the first time in a decade, diamond production is falling behind demand – good news for the African countries who supply more than half the world’s gemstones.

Annual diamond output is expected to average about 127 million carats between 2021 and 2026, according to Paul Zimnisky Diamond Analytics. Production in 2019, when pre-pandemic conditions still prevailed, saw 142 million carats brought to market. Around 152 million carats were mined in 2017, the recent high-water mark. However, production fell to a three-decade low last year with just 119 million carats produced.

“An oversupplied diamond supply chain was the biggest culprit for industry under-performance for the most of last decade,” Zimnisky said. “All-time high diamond prices in 2011 was the primary catalyst leading to the oversupply.”

Globally, diamond production fell 20 percent in 2020 while rough diamond sales plummeted 33 percent, according to a report by Bain & Company. The restrictions introduced to curb the spread of the coronavirus led diamond producing countries such as Botswana, Lesotho and Namibia to shut down their operations while dealers from international diamond centres such as Antwerp, Dubai and India could not access supply. Now, the industry is poised for correction as miners and producers have begun limiting supply to match demand.