The diamond industry is one of the first to recover from the impact of the pandemic, with demand for uncut gems soaring in the past two years amid supply constraints. The demand for diamonds soared as the pandemic limited the access to rival luxury products, a Bloomberg report said.

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After coming to a near halt following pandemic-induced shutdowns in early 2020, the demand for diamonds in the US first started reviving in the holiday season the same year. The US market witnessed stronger-than-expected sales between Thanksgiving and Christmas in 2020, which continued thereafter.

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According to the Bloomberg report, the rough diamond supply is tight as two producers -- De Beers and Russia’s Alrosa PJSC -- have limited supply. However, there is strong demand among major retailers in China and the US in keeping with the strong sales.

“There are supply shortages at the moment. That’s creating a sense of scarcity at every stage of the pipeline,” Anish Aggarwal from diamond advisory firm Gemdax told Bloomberg in June.

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Buoyed by the rise in demand, De Beers, the world’s biggest diamond producer, has hiked prices by about 8 percent in the first sale of 2022, Bloomberg reported on January 16, quoting unnamed sources. The hike is said to be one of the most aggressive price increases by the diamond producer in recent years. The sharpest increase by De Beers of up to 20 percent was for cheaper, smaller stones, while it was lowest, at 5 percent, for larger stones, Bloomberg reported.

De Beers, a unit of Anglo American Plc, organises 10 sales each year at Gaborone, Botswana’s capital, to sell its diamonds. The company had hiked prices in most of its sales through 2021 to recover from the pandemic. Most of the price hikes were focused on stones bigger than 1 carat. The focus has now shifted to cheaper stones.

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The demand for smaller stones, which are used in cheaper jewellery, struggled earlier even though the supply was high. In end-2021, the demand for smaller stones rose as supply tightened and prices of higher quality goods went up.

A De Beers spokesman declined to comment on the price hike.

Meanwhile, Russia’s Alrosa also hiked diamond prices over the last few months.

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(Edited by : Shoma Bhattacharjee)