Dubai set to dominate world diamond trade

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Women walk past the Emirates Diamonds shop at Gold and Diamond Park, a shopping mall specialised in gold and diamond retailing, in Dubai November 15, 2011. The United Arab Emirates, the world's fourth-largest oil exporter and home to gold trading hub Dubai, is rapidly becoming a force in trade of another highly valuable commodity: diamonds. Photo - Jumana/Reuters

The 5th Arabian Business Forum in Dubai was well-attended by Diamond traders. According to Ahmed Bin Sulayem, the executive chairman of Dubai Multi Commodities Centre, Dubai is on the way to become worlds major diamond trading hub in the next few years. Dubai stands at fourth position in world diamond trade rankings and is moving steadily towards the top three positions, the top diamond trader claimed. He added that diamond financing is adding more stability to diamond business in Dubai.

Trade experts say Dubai is in strong competition with other diamond hubs like New York and Mumbai but the lack of expertise amongst local lenders and support from regional banks offering credit are the major factors that set the markets apart.

In the first half of 2011, $25.3bn worth of rough and polished diamonds were traded in Dubai which is up from $35bn in 2010.

Dubai, the UAE’s centre for gem trade, handled $35 billion worth of rough and polished diamonds in 2010, a leap from an annual figure of just $3 million a decade ago, according to Malcolm Wall Morris, chief executive of the Dubai Multi Commodities Centre (DMCC)

ISRAELI DOMINATION

Israel plays a very strong role in the wholesale industry of diamond. Gulf Cooperation Council states do not recognise the Zionist state and relations have been tense ever since its creation in 1948. As a result, Dubai has faced a lot of obstacles to expand its diamond trade market. “Israel now is not as relevant as it used to be. It does not own any mines as all the mines are in Australia, Africa, Russia and Canada,” said Suleyam.

“The mines are not in Israel; the production is not from Israel but it is the trading centre. They are competing as they are, a very strong competitor, but as far as Dubai is concerned, our biggest trading partners are India, Europe and Africa.

DIAMOND TRADE IS EMIRATE’S BOON

Dubai Diamond Trade has set a new record volume of trading 206 million carats so far this year. DMCC records suggest a 57 per cent increase to the tune of 131 million carats traded in first half of 2010 worth around $25.3 billion.

During the first six months of this year, rough diamonds trade in Dubai doubled to 108 million carats compared to last year while the trade of polished diamonds was around 46.8 million carats in exports and 51.3 million carats in exports. Overall, combined polished diamonds trade was around 98.1 million carats worth $19.4 billion during the first half of 2011.

DMCC Executive Chairman Ahmed Bin Sulayem claimed that in less than 10 years, Dubai has become a top trading centre for rough diamonds.

DIAMOND TRADE TO OVERTAKE GOLD

DMCC CEO Malcolm Morris said though Gold remains Dubai’s No. 1 commodity, diamonds are catching up fast, and Dubai’s diamond trade might soon surpass its gold trade in value.

During 2011, gold imports recorded a meagre 1 per cent rise while exports decreased by 8.3 per cent compared to last year. Meanwhile, the diamond market shot up due to high demand in many countries around the world.

Dubai is eyeing to join the league of international diamond centres such as Antwerp, New York and Mumbai. More than third of all diamonds worldwide were sold in Asia and the Middle East.

(Written by Manasa Kesiraju; Edited by Moign Khawaja)

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