If you don’t buy diamonds for a living, you might not have noticed that there has been a shortage of SI clarity diamonds for the past few months. I discussed the matter with 5th generation Diamond Cutter Brian Gavin recently and he expressed concern that the situation was not going to get better any time soon. There is a shortage of polished diamonds being created by a group of speculative investors in Asia who have been buying up diamond rough like it is going out of style, the tail end of the credit crisis, and attempts by the cartels to maintain control of diamond prices. And as if that weren’t bad enough, diamond cutters in India are decreasing production by 50%.
Diamond Cutters in India Cut Production by 50%
Rapaport Diamond News reported today that “India’s influential diamond manufacturing sector pledged to maintain production at levels of up to 50 percent lower than what is typical for the fourth quarter in an attempt to manage the liquidity crisis plaguing the industry.”
This will definitely have a dramatic effect upon the availability of polished diamonds in all sizes and qualities, because India is a significant producer of polished diamonds. However this pledge by the Indian diamond manufacturers does not affect the production by diamond cutters such as Brian Gavin of Brian Gavin Diamonds, or Paul Slegers of Crafted by Infinity, who both manufacture diamonds out of Antwerp, Belgium… they are however affected by the overall shortage of diamond rough in terms of being limited in the variety which they are used to being able to offer their online customers.
I just conducted a search within the Online Diamond Inventory of High Performance Diamonds for Crafted by Infinity Hearts & Arrows Round Brilliant Cut Diamonds with a carat weight between 0.70 and 10.00 carat, with a clarity of SI-1, and a color between D to J color, and there are 24 diamonds currently available. All Crafted by Infinity diamond dealers have access to the same global inventory, so that’s it folks!
I conducted a search within the Online Diamond Inventory of Brian Gavin Diamonds for Signature Hearts & Arrows Round Brilliant Cut Diamonds and diamonds with blue fluorescence from the Brian Gavin Blue collection and got a total of 59 results… I can remember a time when this same search would have produced hundreds of results! Things got a little better when I changed the clarity parameter to the VS-2 clarity rating, the total number of VS-2 clarity diamonds available from Brian Gavin for the same range of color and carat weight jumped up to 69 diamonds.
How will the Shortage of Goods affect Diamond Prices?
With the understanding that I’m not holding a crystal ball, I think that the shortage of goods will result in an increase in diamond prices overall, but especially in the SI clarity range where goods are already scarce. These are typically the type of goods which my clients like to buy for diamond earrings and diamond pendants during the holiday season… they are also the type of goods that people turn towards when trying to maximize the size of a center stone for an engagement ring while working within the constraints of their budget.
The good news is that there seems to be an abundance of high clarity and high color goods, and we might see prices for that range of goods remain steady while prices for lower clarity, lower color goods increases… The keyword here is “might” and I’m basing this assumption upon similar circumstances which I’ve seen in the past, but with a little insight that I picked up from a conversation that I had with Brian Gavin yesterday where he told me that the prices of a lot of the VVS clarity goods are practically the same as the prices for VS clarity goods of the same carat weight and color… So if you’re a fan of high color and high clarity diamonds, this might just be the best opportunity for you to find the best deal!