Natural Diamonds Face Competition From Synthetic

Times News Network writes:

While the gems and jewellery industry is preparing itself to take on the Chinese dragon, the problem of synthetic diamonds making steady in-roads lurks beneath the shiny surface of the industry.

“India is a price sensitive market and synthetic diamonds could give competition to natural diamonds over the next decade,” said Ronald Lorie, CEO of International Gemological Institute (IGI).

Synthetic or cultured diamonds are laboratory-created diamonds that have the same chemical, optical and physical characteristics as mined diamonds. The two are literally indistinguishable to the naked eyes.

The IGI’s Mumbai Gemological laboratory receive close to three to four synthetic diamonds of yellowish orange colour every week, which are easily identifiable. But it is not the case with white synthetic diamonds, which look very similar to original diamonds, admits Mr Lorie.

Even the recently published KPMG report on the industry speaks broadly about the emergence of synthetic diamonds as a commercially viable alternative posing a new challenge for the world’s diamond industry. There is a dual threat to the natural diamond industry — threat of substitution and deception impacting consumer confidence and the threat of changing consumer preference, said the report.

The KPMG has estimated the current value of synthetic at wholesale to be close to $50 million and expects the market to grow at a CAGR of 45% over the next 10 years. Giving the current situation the sale of synthetic diamonds jewellery is likely to cross $2 billion by 2015 at wholesale against the sale of natural diamond jewellery sales of $6 billion at the retail level.

With the view to inform and protect the consumers and the industry, the IGI has started grading the synthetic diamonds from January 1, 2007. IGI has been laser inscribing synthetic diamonds it grades this way with the words ‘laboratory-grown,’ said Mr Lorie.

Chandrakant Sanghvi, regional chairman of GJEPC said: “There is no threat to the industry at this moment.” But synthetic diamonds could replace the natural diamonds in jewellery due to its cheap value.”

Chuni Gajera owner of Laxmi Diamond said: “Synthetic diamond can give a stiff competition to natural diamonds. But synthetics are not being sold as real. Synthetics could gain momentum in the sale of jewellery.

More info @ http://economictimes.indiatimes.com/Markets/Commodities/Natural_diamonds_face_competition_from_synthetics_/articleshow/1144422.cms