The present development is characterized by the fact that De Beers' control, although still significant for the regulation of prices, is no longer the only determining factor.
De Beers presently accounts for approximately 40% of the worldwide diamond mining, whereas the remaining 60% are so-called "outside goods", the name given to diamonds whose sources are mines which have no contractual relationship with De Beers (BHP Billiton, Rio Tinto and Alrosa (Russia)). The presently new emerging markets, both in China and India, have such large potential, that they push the prices of all natural resources related commodities (oil, steel, carbon, etc.) upwards.
India employs an estimated one million diamond polishers, and polishes 10 million stones per day. When calculated by pieces, India polishes 80% of the entire worldwide diamond production. Indian diamond export figures have increased consistently by 20% year over year for the past five years, which means that India currently exports 2.5 times the diamonds (in terms of value) as it did five years ago.
The mining of raw diamonds has not been able to satisfy the incredibly rapid increase in demand. Since both the Chinese and the Indian economies are expected to maintain their growth figures, new middle and high social classes are expected to emerge accordingly, and their demand will probably push the prices further up.
Irrespective of the aforementioned, diamond prices have increased more significantly in the course of the past two years than during the previous eight years. And this increase is not an artificial one like the one recorded in 1978, but is based on the large demand experienced in the jewelry markets.
Whether or not De Beers will attempt to curb this development is still unclear. The question is whether De Beers, with its 40% market share, is still in a position that enables it to exert such influence. If De Beers should not be able to curb the current development trend of prices, diamond prices could once again increase significantly, however without the option of receding again. This is due to the fact that purchased diamonds are withdrawn from the market, differently than investment diamonds.