Just in time for June weddings and romantic springtime flights of fancy, the world's diamond cartel announced a price increase sure to be reflected in the retail price of diamond jewelry, experts said.
A 15.5 percent average price boost by De Beers Consolidated Mines Ltd., the South African concern that controls more than 80 percent of the world diamond market, will set off a ripple effect that will end with retail prices ultimately being pushed up, according to jewelry retailers who said it was too soon to tell exactly what the retail price increases will be.The average price hike, announced by De Beers Tuesday, is its largest in 10 years and is effective at the cartel's next diamond buying site later this month.
The biggest boosts are anticipated in high-quality rough diamonds of one carat or less, which are most often finished into stones used in diamond jewelry, said Lloyd Jaffe, chairman of the American Diamond Industry Association.
Russell Shor, senior editor of the trade magazine Jewelers' Circular-Keystone in Radnor, Pa., said De Beers' price hikes for such stones are expected to range from 21 percent to 23 percent.
A stronger-than-expected demand for the smaller stones in Japan is driving the price increases, Shor said. Japan imports 28 percent of the world's polished diamonds second only to the United States with 32 percent.
"When De Beers raises its prices on rough diamonds, that is passed on to the cutters, who pass it on to wholesalers, who pass it on to retailers," said Robert Bridge, president of Ben Bridge Jewelers, a 32-store chain based in Seattle. "In each case, some of the increases are passed on to consumers."
Both Bridge and Jaffe said prices in the chain of diamond jewelry production have already gone up in anticipation of the De Beers increase.
However, Michael Roman, chairman of Jewlers of America, a trade group representing 13,000 jewelers, said diamond jewelry currently in retailers' inventories should not be affected.