Dubai Diamond Exchange (DDE), the youngest diamond bourse in the world, has recorded double-digit growth on the back of a booming market, said its chief executive.
High oil prices and Arab customers’ reluctance to travel to international diamond markets to purchase the precious stones have also helped the market’s success, said Youri Steverlynck.
Steverlynck told Business 24|7 that diamond trade conducted through the DDE saw sales worth more than $9bn (Dh33bn) annually. He said the bourse, which started from scratch five years ago, benefited from 20 per cent growth in business in the region from the GCC to Turkey.
“In 2007, we crossed the $4bn [Dh14.6bn] mark in rough diamonds and $5bn [Dh18.3bn] in polished diamonds,” he said. “Antwerp, New York, Mumbai and Hong Kong are the leading diamond exchanges in the world and DDE is completing their services, not competing with them.
“The Israeli diamond market is the only other diamond exchange in the Middle East but it caters mainly to the US market, which is likely to witness slowdown due to the sub-prime problem and recessionary trends.”
The United States, European and Japanese diamond bourses are witnessing slow or negative growth due to fears of recession.
“Unlike gold prices, which have been skyrocketing, diamond prices have remained stable for almost a year now. We are offering better services to customers at international prices. If we can play that role effectively, DDE will do a fantastic job in the world diamond market.
Most of the trade done at the Israeli Diamond Bourse is focused on the US market. Due to the weak US market, they are also looking towards the Eastern markets, such as India and China.”
He said many diamond traders who traditionally operated from the Antwerp diamond exchange – the world’s largest diamond bourse – were queuing up to get a foothold in the Middle East market. The best performing diamond exchanges in the world are DDE and the Bharat Diamond Bourse in Mumbai. “But the largest diamond jewellery market in the world remains the US, which accounts for more than 50 per cent of the global market. European and Japanese markets control 12 per cent of the business each. The Middle East is the best upcoming market, plus it is close to two emerging Asian markets – India and China.
“The Japanese market experienced negative growth due to recession and the diamond business experienced the knock-out effect. DDE’s advantage is that it is a bridge between China and India,” Steverlynck said. The global diamond jewellery business is worth $70bn (Dh256.9bn) per year and the Middle East accounts for 15 per cent of the market.
“The European diamond markets have been flat for the past four years and the Japanese diamond bourse witnessed negative growth three years ago. The US diamond market has almost peaked.
Therefore, it makes sense to build a wholesale diamond centre in a place where retail consumption is rapidly growing,” he said.
About 70 per cent of the diamond market is based on Saudi customers, who used to shop for diamonds in the US, Europe and India.
Due to security and other concerns, Saudis stopped shopping for diamonds in the international markets and instead turned to DDE. Dubai is emerging as an important destination for both retailers and suppliers.
AT THE HELM
Youri Steverlynck, the chief executive of DDE, has extensive experience in the international diamond trade.
A lawyer with expertise in commercial and public law, he left the Antwerp Bar for the diamond business when he become spokesman of Belgium’s diamond industry in 2000. He was appointed marketing director of Antwerp World Diamond Centre in 2004 and became responsible for the organisation’s public affairs unit. In 2006, he joined Dubai Multi Commodities Centre as general counsel for Diamonds.