Other experts have been positive on diamond prices and demand this year, pointing to the continuing mismatch between demand for and supply of high quality stones."The market for rough diamonds has continued to improve following the correction to prices in September 2011," Gem Diamonds said in a recent statement. "The Gem Diamonds Price Index has shown increases in every sale since this correction and is up some seven percent in 2012. "Gem Diamonds anticipates rough prices across the market to continue increasing into the second quarter of 2012 and, despite the relatively thin volumes being traded in the polished market in high end goods, prices in these goods both in the polished wholesale market and high end branded auctions are expected to improve further."
Earlier this year, De Beers Botswana CEO, Neo Moroka, told Mmegi Business that the demand for diamonds has been strong at the sights or auctions held by the Diamond Trading Company Botswana (DTCB) since the beginning of the year. He said the sales were positive despite the fact that cutting and polishing firms still had stockpiles of diamonds from sights held last year.
"Due to the downturn at the end part of last year, companies have been getting rid of the stockpiles and when the industry is selling off stockpiles, the performance is not usually good," he said. "But much to our surprise, our sights (rough diamond auctions) in the first quarter of the year have been above expectations."The April drop, other analysts believe, could be an indicator of higher inventory levels among diamond manufacturers and retailers, as a consequence of the strong February and March sales. Higher inventories and softer market demand generally mean lower rough and polished diamond sales.