With the primary objective of promoting the development of the fancy coloured diamond industry in Asia particularly the Greater China markets, Asia Fancy Color Diamond Association (AFCDIA) was established in Hong Kong on 6 March 2016. This trade promotion organisation positions itself as a unique forum for players in the fancy coloured diamond industry to pool their collective expertise in an open and entrepreneurial environment to share ideas and implement education, training and marketing programmes regarding fancy coloured diamonds as an complement to the whites.
“Right now there is a lot of doom and gloom in the industry but I think fancy coloured diamond can be a bright spot. It is young and exciting,” said Lily Leung, chairperson of the association. She told Hong Kong Jewellery that during the economic slowdown, sales and market situation of fancy coloured diamonds is relatively good, as they are much rarer than the white counterparts. The comparatively new market has plenty of room for growths.
Eliad Cohen, founding member of AFCDIA and managing director of Israel-based Novel Collection which specialises in natural fancy coloured diamonds, expressed a similar view on the market situation. He revealed that compared to other segments in the diamond industry, fancy coloured diamonds are doing well. Special, large, and rare stones are very much in demand this year. “If you really have something special, it is not difficult to sell. The difficulty is how to find them,” he said.
For the entire fancy coloured diamond production, about 50 to 60 percent is yellow diamond of which the prices reach out to a broader audience. Cohen expressed: “Prices of yellow diamonds would not decrease in general; but prices of certain items like small sizes have dropped a little by five to 10 percent. For high-quality categories including fancy vivid, fancy intense and other strong colour yellows, prices are always on an upward trend.” Based on his observation, commercial items such as two- to three-carat in yellow is becoming hot again in 2016, whereas prices of fancy yellow in this size range are softer. The mid-range segment has not been active in the past two years, or sellable, including three- to five-carat fancy yellow and five-carat fancy light yellow in price below HK$500,000 or approximately US$64,000.
When diamond miners cut production last year, fancy coloured diamond industry was influenced considerably resulting in less supply and higher demand. “The rare fancy coloured diamonds became even rarer. Our challenge today is how to find fancy coloured diamonds but not how to sell them,” stated Eden Rachminov from Rachminov Diamonds 1891 which focuses on the high-end fancy coloured diamond niche market in Asia, Europe and the United States. He is also the founder of Fancy Color Research Foundation (FCRF).
FCRF is a non-profit organisation dedicated to promoting transparent trading, fair-trade principles and high ethical standards in the industry. According to FCRF’s Fancy Color Diamond Index™ (FCDI) published in February 2016, fancy coloured diamonds have demonstrated stability with overall prices growing on average 0.3 percent during the fourth quarter of 2015. The strongest segment was fancy yellow diamonds which grew by 1.1 percent. The strongest non-yellow categories were one-carat and 1.5-carat fancy vivid blues and pinks, witnessing price increases of 4.4 percent and 3.7 percent respectively. Overall, fancy blue logged small price declines, after significant price increases in the last two quarters. The market is showing clear preferences towards fancy intense and fancy vivid, while the lighter colour fancy diamonds registered softened demand.
Rachminov believes that the price trend of fancy coloured diamonds will stay strong and stable, and consumers will need to settle for lower quality and wider range of goods in the future. Lower clarity, strong blue fluorescence and lower intensity will be part of high-end market. “Fancy coloured diamond as an asset is very reliable – its price will go up smoothly, like 10 to 15 percent yearly, while not jump crazily like 50 to 60 percent,” he added.
Speaking of investing in fancy coloured diamond during the economic downturn, Ephraim Zion, managing director of Hong Kong-based Dehres and member of the board of advisors for FCRF analysed that fancy coloured diamond is a mark of values, can be transported easily to any place in the world, and is a variety of sound asset with financial security. He thinks that the hottest category is pink, while blues hold huge potential due to its scarcer supply.
“Fancy coloured diamonds are more complicated for consumers to take in, so it requires greater effort to educate them, raise their confidence and build trust,” Lily Leung emphasised. According to her, joining hands with trade organisations will be one of AFCDIA’s strategies to promote fancy coloured diamonds and gain wider recognition of the association. Supported by Gemological Institute of America (GIA), AFCDIA is in discussion with Natural Color Diamond Association (NCDIA) to cooperate and further expand the Asia market.
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