By Summer Said
Diamond giant says strong demand in Gulf region, especially the UAE, offset steep downturn in US.
Diamond giant Rosy Blue said on Tuesday the outlook for diamond sales in 2008 was very positive, driven by continuing strong demand in the key Gulf Arab market.
"We are extremely bullish about the diamond industry in the Gulf region, and particularly the United Arab Emirates," Chairman Harshad Mehta told newswire Reuters in an interview.
"We are planning to increase our presence in the Gulf market... which we see as a major sales centre because of higher oil prices and growth in tourism."
The Belgian-based diamond merchant said sales last year totalled $120 million, up 57.9% from 2006. It expects this year's sales to surge to $250 million.
A steep downturn in the US, the world's biggest diamond jewellery market, could dampen sales there for cheaper products, but healthy demand was set to continue in China, India and the Middle East.
In Dubai traders said they expect robust diamond jewellery demand on soaring disposable incomes triggered by booming crude oil prices - and flamboyant tastes.
In the malls and souks, mainly Gulf Arab women who are vigorous buyers jewellery, said they prefered to buy pieces with diamonds, regardless of the price.
"We are seeing this trend as people have started realising the [different] aspects of diamonds," Mehta said.
"Also, the different price points that diamonds can be available in, has made people realise that diamonds are not 'expensive' but can offer a value for their money."
Retail diamond jewellery sales in the GCC is worth about $2 billion a year and is expected to see a significant increase in 2008, the Dubai Chamber of Commerce and Industry (DCCI) has said.
While Saudi Arabia, the world's largest exporter of oil, accounts for about three quarters of total Gulf Arab diamond jewellery purchases, Dubai hopes to snatch a greater share of the diamond trade as it strives to diversify its economy to compensate for its falling revenues from dwindling oil output.
"Dubai is the diamond destination of the region... and it can compete with major diamond hubs," Mehta said.
Total trade in rough diamonds in Dubai grew 5.36% to $3.93 billion in 2006, according to the Dubai Diamond Exchange - the region's only exchange to service the diamond trade from mining to retail.
Dubai's major trading partners for rough diamonds include India, Europe, China and Russia. (Reuters)