Don’t let your engagement ring come as a nasty surprise

Online retail jeweller Diamond Manufacturers warns that double digit growth in rough diamond prices could send jewellery prices sky high.

The diamond industry is very volatile where supply and demand is concerned as there is hardly stability between the both.  This creates a situation with either too many goods in the market with not enough buyers, or - the current and most frequent situation - a lot of buyers but not enough goods for a fifth of these buyers. When this happens, diamond prices skyrocket.

A lack of bank lending led to a stagnation in the trade in rough diamonds, which are typically bought by sight holders and manufacturers on credit.  Since March 2009, however, rough diamond prices have risen by 55-60%, helped by many suppliers cutting production by as much as 50% in response to the credit crunch.

Adrie van der Luijt, Press Officer for Diamond Manufacturers, said: "Rough diamond prices have increased at a record double digit percentage month-on-month within the last few months.  Polished diamonds - what we and our competitors sell - prices are dependant on rough diamond prices as they come from such.

"It's therefore only a matter of time before the price of polished diamond will significantly increase.  In fact, they have already started doing so.  Unlike many of our competitors we have all our diamond jewellery items in stock, which means that our prices are less volatile.

"As a pure online business we have lower overheads than many of our high street competitors, who are literally stuck between a rock and a hard place when it comes to passing on price increases to the consumer."

"Shopping around for the lowest prices on engagement rings and diamond jewellery will be more important than ever this year."