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It was a year that many expected to be very different. The COVID crisis, which has dominated events though most of 2020 and 2021 appeared finally to be fading in the rearview mirror, and the almost all indicators were facing upward.

Indeed, 2021 has ended with what Bain & Company and the Antwerp World Diamond Center in the 11th of their annual reports on the diamond industry called a “brilliant recovery.” Income rose by 62 percent in the diamond mining segment, 55 percent in the cutting and polishing sector, and 29 percent at for diamond jewelry retail. This was 13 percent, 16 percent and 11 percent, respectively, above pre-pandemic levels.

After its first rough sales cycle of the year in January De said that demand for rough diamonds remained robust, with sales almost twice that of the $336 million reported for the tenth and final cycle of 2021.

“As anticipated, there was strong growth in consumer demand for diamond jewelry over the end of year holiday season,” commented De Beers CEO Bruce Cleaver. “As a result, we saw the continuation of robust rough diamond demand in the first sales cycle of the year as buyers focus on restocking depleted inventories.”

De Beers took the stronger demand and rising price levels in the polished diamond market into consideration, raising rough prices at its January sight by an estimated 15 percent for smaller goods and 5 percent to 12 percent for 3-grainer and larger diamonds. For its part, Russian producer Alrosa increased rough prices by about 10 percent during its trading session in January.

But on February 24, the mood suddenly changed, and it had very little to do with the diamond industry or the markets.


While the leadership of the diamond industry gathered in the United Arab Emirates, Russian forces launched their invasion into Ukraine, and almost instantaneously what appeared to be a sure thing was no longer certain.

In a statement released just one week after the start of the war, the trade association Jewelers of America cautioned its members about buying Russian products. “While the U.S. has not, for the most part, directly ‘sanctioned’ diamonds, precious metals or precious gemstones from Russia or Belorussia, the current sanctions and continuing Anti-Money Laundering (AML) requirements effectively prevent U.S. companies from legally – and responsibly – sourcing materials from those countries,” it stated.

The Biden Administration would later impose stricter measures on Russian diamond imports, but internationally the sanction regimes were inconsistent, with the European Union, India, Israel and the UAE all not explicitly banning trade in Russian goods. But because none in the trade wanted to openly invite scrutiny from the American authorities,  and also because restriction on money transfers made transaction with Russian companies difficult there was undoubtedly an impact on trade.

Then there were the secondary effects, caused largely by the economic fallout from sanctions against Russian energy suppliers. Inflation rates soared and the threat of recession was high, particularly in the European Union that was very dependent on Russian fuel imports.


Another concern was China, the world’s second largest market, whose government remained committed to a no-COVID policy, although this had been relinquished by almost all other countries around the world.

The difficulty in dealing with a closed-off China was brought home mid-year when Informa Markets Jewellery announced the world’s largest jewelry show, that Jewellery & Gem World (JGW), will be relocating from Hong Kong to Singapore this September. The company stressed that this would be one-off arrangement, applicable only in 2022.

The decision to stage JGW Singapore was a strategic move aimed to make the show venue more accessible to international suppliers and buyers clamoring for the in-person show experience, Informa said.

“The last two years have been extremely challenging for everybody, and we, as an industry, have been doing our utmost to not only keep businesses running, but moving forward,” said David Bondi, senior vice president of Informa Markets in Asia.

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According to Bain & Co., China by itself accounts for as much as 21 percent of global luxury sales, and its government intimated that the current health crisis could result to the growth of its economy being cut to about 5.5 percent.

The industry entered the second half of the year with its fortunes appearing very uncertain.

(Part 1 of 2-part article)