Walk through the Dubai Multi Commodities Centre (DMCC) today, and you'll notice something: the conversations have changed.
Five years ago, it was all about natural diamonds from Africa and Russia. Today, the smart money is talking about lab-grown supply chains from China.
Why Dubai Is Perfectly Positioned
Dubai has always been a diamond trading hub because of three advantages:
- Tax-Free Zone: No VAT, no customs duty on re-exports
- Geographic Bridge: Between Asia (supply) and Europe/Africa (demand)
- Trusted Infrastructure: DMCC certification, secure vaults, established logistics
These advantages apply equally to lab-grown diamonds. In fact, they're even more valuable for LGDs because the supply chain is concentrated in China.
The New DMCC Business Model
Traditional natural diamond traders are adapting by:
- Setting up HPHT inventory in Dubai free zones
- Importing bulk from Henan, sorting/grading in Dubai
- Re-exporting to Africa, Europe, and the Middle East with DMCC documentation
The margin is in the middle. A trader who buys at $80/ct from China and sells at $110/ct to a Nigerian retailer is making $30/ct with minimal risk.
The "Dubai Premium" Explained
Why do buyers pay more for stones sourced through Dubai versus direct from China?
- Trust: DMCC certification adds credibility
- Convenience: Faster shipping to Africa/Europe than from China
- Payment Terms: Dubai traders often offer 30-60 day terms, while Chinese factories require prepayment
- After-Sales: Easier to resolve disputes with a Dubai entity than a Chinese factory
The Opportunity for New Entrants
If you're considering setting up a lab-grown diamond trading operation in Dubai, now is the time. Here's why:
- Low Barriers: DMCC company setup takes 2-3 weeks
- Growing Demand: African and Middle Eastern retailers are actively seeking LGD suppliers
- Supply Stability: Chinese HPHT production is mature and reliable
We work with several DMCC-registered traders. If you're setting up in Dubai, we can provide:
• Consignment inventory (no upfront payment)
• Dubai-based QC inspection before you commit
• Flexible payment terms for established traders
The Risks to Watch
Not everything is perfect. Be aware of:
- Oversupply Risk: If too many traders enter the market, margins will compress
- Direct Competition: Some large retailers are now buying direct from China, bypassing Dubai
- Regulatory Changes: UAE tax laws are evolving; stay informed
The Bottom Line
Dubai's role in the diamond trade isn't disappearing—it's evolving. The traders who adapt to lab-grown supply chains will thrive. Those who cling to natural-only models will struggle.