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Diamonds (Global Market)
2023
Diamond exports from Russia for the year decreased by 12% to 32.42 million carats
In 2023, diamond exports from Russia amounted to 32.42 million carats. This is 12% less than in 2022, when this figure was 36.73 million carats. Such figures are given in the materials of the Kimberley Process, which TAdviser got acquainted with in early October 2024.
It is said that in 2023 the average price of diamonds rose by 8% - to $113.8 per carat. In monetary terms, exports from Russia are estimated at $3.68 billion, which is 5% lower than the result for the previous year - $3.87 billion.
Diamond production in Russia in 2023, as noted, decreased by 11%, amounting to 37.32 million carats. This was the most significant drop among the top three mining countries. Thus, in Canada, production fell by 2% - to 16 million carats, and in the Democratic Republic of the Congo - by 23% with a total result of 8.35 million carats. At the same time, in Botswana, production rose by 2% - to 25.1 million carats, and in Angola, an increase of 11% was recorded - to 9.75 million carats. At the same time, Russia in 2023 accounted for 33% of world diamond production, Botswana - 23%, Canada - 14%, Angola - 9%, the Democratic Republic of the Congo - 8%.
The UAE became the largest exporter of diamonds in 2023 with a share of 30%. In second place is the European Union with an indicator of 17%. Russia accounted for 11% of world exports. The largest importer of diamonds in 2023 was India with 42% (127.75 million carats).
In general, global diamond production in 2023 decreased by 8%, reaching 111.52 million carats. The market is being affected by a decline in demand in China and competition with synthetic stones, which bring jewelers a significantly larger margin, it said. At the same time, weak demand and low world prices affect the cost of diamond exports from Russia. At the end of 2024, according to Rapaport forecasts, diamond supplies from the Russian Federation may be reduced by 17% - to $3.19 billion.[1]
Plan of Western countries to introduce a ban on the purchase of diamonds from Russia
After the outbreak of the conflict in Ukraine, dealers in Antwerp (Belgium) were asked to boycott Russian stones. By November 2023, Western countries want to give the boycott an official character by introducing an official ban on Russian stones. The G7 announcement is expected for several weeks, but disagreements over details drag on the process - Reuters.
36% rise in diamond exports to Belgium in January
Diamond exports from the Russian Federation to Belgium in January 2023 increased by 36%.
2022
Russia is the largest diamond producer and exporter in the world with a record 35% share of the world market or 41.9 million carats
Russia is the world's largest diamond producer and exporter, with the world's largest diamond deposit located in Yakutia. According to forecasts of the consulting company Bain, at the end of 2022, 33% of production falls on Russia, 19% - on Botswana, 15% - on Canada, as well as significant volumes of stones are mined in Congo, South Africa, Angola and Australia. At the same time, the world reserves of diamonds at this time are about 1.8 million carats.
As of November 2023, Russia in 2022 for the first time occupied 35% of the world diamond production market. Prior to that, the country occupied from 22% to 33% of the market in this area for many years. Over the year, 119.96 million carats were produced in the world, of which 41.9 million were in Russia.
The Russian government approved zero VAT for the purchase of diamonds and diamonds
The Russian government approved amendments to the Tax Code to introduce a zero VAT rate (previously it was at 20%) for the purchase of diamonds and diamonds by Russians. Deputy Finance Minister Alexei Moiseev announced this on June 23, 2022.
According to him, the innovations will help stimulate the demand of citizens for investment diamonds and sell them more efficiently inside Russia. At the same time, at the end of May 2022, Moiseev said that the Ministry of Finance was not considering the abolition of VAT on the purchase of diamonds by individuals.
The document approved by the government introduces precious metals in ingots into investment circulation, exempting from value added tax operations to sell banks precious metals in ingots seized from storage facilities to individuals. The norm applies to legal relations arising from March 1, 2022.
Boris Krasnozhenov, head of the analysis department for the securities market at Alfa-Bank, believes that with the abolition of VAT, the demand for diamonds for investments will increase, as evidenced by the multiple growth in gold sales by banks after a similar measure.
I think this is one of the important steps, because after all, the conversation here is about 20%. In this case, of course, additional steps are required to improve liquidity from the same private banks in order to advertise the asset for their customers, to promote it. It is clear that liquidity is associated with the sale of diamonds, and for this you need to go to auctions and exchanges, "he said in a conversation with Kommersant FM.
In early June 2022, the Kommersant newspaper reported that Russia had reduced diamond exports to key markets - India and Europe. However, due to rising prices for raw materials, Russian companies did not lose revenue.[2]
2021: 31.1% reduction in diamond production, to 31.2 million carats
Diamond production in Russia at the end of 2020 amounted to 31.2 million carats, which is 31.1% less compared to 2019. In money, the indicator decreased even more - by 45.2%, to $2.26 billion. The average price of diamond for the year decreased from $90.93 to $72.3 per carat. This is evidenced by the data of the Ministry of Finance of the Russian Federation.
According to the Prime agency, citing statistics from the department, diamond exports from Russia in 2020 amounted to 38.6 million carats, which is 1.6% less than a year ago. In monetary terms, the volume of exports decreased by 15.9%, to $2.95 billion.
The largest number of Russian diamonds at the end of 2020 was delivered to Belgium (19.74 million carats worth $1.31 billion), the UAE (14.1 million carats worth $794.5 million) and India (4.1 million carats worth $638 million).
As for imports, in 2020, 310.5 thousand carats of diamonds were imported into Russia (-70.4% by 2019) in the amount of $109.1 million (-63.4%).
The largest Russian diamond mining company Alrosa in 2020 reduced diamond production by 22% compared to 2019 - to 30 million carats. Sales of diamonds from the company decreased by 4%, to 32.1 million carats.
Diamond sales in Russia and around the world have been hit hard after countries quarantined and blocked borders due to the COVID-19 coronavirus pandemic. According to the deputy general director of Alrosa, Yevgeny Agureev, this limited, and in some cases completely blocked, trade.
The market was supported by a partial transition of sales to online, as well as consumers who could not spend their money on travel and eventually bought jewelry. According to experts, the diamond market in 2020 continued to go through hard times. First, the fashion for diamonds is going away. Secondly, the market for natural stones is under great pressure from emerging technologies for the synthesis of diamonds artificially grown in laboratory conditions.[3]
Notes
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