The fancy colour diamond market has been experiencing an upsurge in popularity, with adiscerning and well-heeled consumers aspiring for these rare stones, and not minding paying a premium for them. It has rapidly transformed from a risky and speculative business into an attractive and lucrative niche, thanks to a steady growth in demand, diminished supply and increased prices.

PRICES ON THE UP AND UP

With demand accelerating, prices of fancy colour diamonds have also seen a steady rise. According to the Fancy Color Research Foundation (FCRF), a non-profit that promotes transparency and fair trade in the market, “The average price of all colours and sizes of fancy colour diamonds climbed by 3.9% in 2022, led by a 4.6% increase in all Yellows, and followed by a 3.9% rise in Pinks, and 1.8% in Blues. This climb was in contrast to the annual decline in white diamonds and other major financial markets.” The prices reported by the FCRF are based on its own Fancy Colour Diamond Index, which is built on tracked data for yellow, pink, and blue fancy colour diamonds’ performance in major global trading centres such as Hong Kong, New York, Geneva and Tel Aviv. Sharing his insights, Jamie Clark, Head of Global Operations, De Beers Institute of Diamonds, says, “Fancy colour diamonds have become more well known, increasingly on-trend and aspirational, so their prices have risen considerably in recent years. There are published figures for the past 10 years of nearly an 80% increase, with 2022 alone seeing a 4% increase on average. Fancy colour diamonds can be so rare that they have proved to be just as good an investment as original artworks, or vintage sportscars.” While consumer interest in fancy colour diamonds is increasing, seeing the rising trend in prices and demand, investors are also closing in on them. “There’s a big difference in prices now,” says Denish Shah of Mumbaibased D Diam. “For example, a 1ct fancy red (Argyle) we used to get for $ 2 million, and now it is hard to find for even $ 5 million. The price of Yellows, especially the intense and vivid variety, has more than doubled,” he adds. The onslaught of COVID-19 too has had a say in the prices of fancy diamonds. According to Harsh Maheshwari, Kunming Diamonds, Hong Kong, “The prices of fancy colour diamonds have undergone a significant increase in the past five years. This is due to the growing demand for these diamonds, as well as the limited supply of high-quality fancy colour diamonds. In addition, the pandemic has also contributed to the increase in prices, as people are looking for alternative investment options.” Talking about his experience, Ankit Shah of Ankit Gems, Mumbai, says, “The prices of fancy coloured diamonds have only increased over the past five years. Prices for pink, blue and purple coloured diamonds are leading, and those for yellow diamonds have also risen significantly.” It is not just that the prices of fancy colour diamonds are increasing – diamond dealers feel the trend is not temporary, but will continue in the foreseeable future. “Prices have gone up, prices are going up, and prices will continue to go up,” says Darshit Hirani, P Hirani Exports, Mumbai, adding, “See, the supply is limited. And COVID has played a part in disrupting supply and kicking up prices. But even otherwise, prices have remained strong. They dropped a bit in between, but bounced back very strongly. The Russia-Ukraine conflict too is responsible for the disruption in supply, and the resultant price jump. As of now, there is a marked scarcity of pink diamonds.”