Dubai touted as new diamond trade hub
DUBAI’S diamond trade will grow as the Middle East emirate attracts dealers from the traditional hub in the Belgian port of Antwerp after one of the city’s main gem lenders closed, depriving buyers of needed financing, according to National Bank of Fujairah.
“Do we anticipate a big shift of rough diamond traders to Dubai?” Davy Blommaert, the unit head for precious metals and diamonds at National Bank of Fujairah, said on Sunday. “Yes, that we foresee.”
Dubai, historically a pearl centre, is growing into a trading hub for the $57 billion (R772bn) global diamond market to take advantage of its transport links to India, the biggest importer, and expanding financing available to the industry. Imports into the United Arab Emirates (UAE) rose to $5.9bn last year from $5.1bn in 2013, according to the Kimberley Process.
National Bank of Fujairah, partly owned by the governments of Fujairah and Dubai, two of the seven sheikhdoms in the UAE, had entered the diamond financing market about six months ago to capitalise on the shift in trade and was targeting loans between $5 million and $50m, Blommaert, 34, said.
Diamond buyers will face a lack of financing after Antwerp Diamond Bank, the lender that served the industry for 80 years, winds up operations, removing about $1.5bn in funding to the industry. ABN Amro Bank and Standard Chartered also curbed funding to the industry.
Antwerp imported about $16bn of diamonds in 2014, according to the Antwerp World Diamond Centre, citing data from the Kimberley Process. Global diamond imports totalled about $57bn last year, according to Kimberley Process data. India, where most manufacturers of diamond jewellery are located, took in $17.2bn of the stones last year.
The UAE will take over as chair of the Kimberley Process next year, according to a statement yesterday from the Dubai Multi Commodities Centre, the business zone established in the emirate to foster trade in raw materials. Angola is the current chair.