Editor’s Note
This article discusses shifting market dynamics in the diamond industry, highlighting a reported consumer preference shift back to natural stones as lab-grown supply surges and prices fall.
Ferial Zerouki, President of the World Diamond Council, has stated that the popularity of lab-grown diamonds is waning because their supply has increased significantly, and consumer preference is shifting back towards natural diamonds. Natural diamond prices have been on a decline since mid-2022, primarily due to the rising popularity of lab-grown diamonds among young jewelry buyers. However, a sharp drop in the prices of lab-grown diamonds, caused by increased production in China and India, has weakened consumer confidence.
According to diamond industry analyst Edahn Golan, the average wholesale price of one-carat and two-carat lab-grown diamonds has fallen by 96% since 2018. Experts have warned that if prices fall this low, these diamonds will become merely a fashion accessory and will not be able to compete with natural diamonds, especially in the wedding market.
Zerouki said. However, she also noted that the improvement in demand for natural diamonds will not happen on its own. Initiatives like the Luanda Agreement are essential for this.
The Luanda Agreement is an agreement under which diamond-producing countries and companies will create a collective marketing fund for natural diamonds. Under this agreement, countries such as Angola, Botswana, the Republic of Congo, Namibia, and South Africa have committed to allocating 1% of their annual diamond sales revenue to this campaign. The aim of this move is to brand and promote natural diamonds to increase consumer confidence and strengthen the demand for natural diamonds again.