Dubai traded more than US$40 billion (Dh146.9bn) of diamonds last year, a record reflecting the emirate's growing stature in the global market.
The city's proximity to markets and producers, its logistics infrastructure, and a low-tax and light-regulation regime have made it an attractive location for the diamond industry, according to the head of the Dubai Multi Commodities Centre (DMCC), the authority in charge of the free zone in Jumeirah Lakes Towers that houses the diamond trade.
"We want to make sure that we've utilised all of Dubai's advantages and potential. By doing that, we've made Dubai one of the top and still growing centres," said Ahmed bin Sulayem, the executive chairman of the DMCC.
Definite figures for last year have yet to be released by the auditors, and Mr bin Sulayem said the $40bn figure was an estimate. Dubai's diamond trade was valued at about $35bn in 2010, and $20bn in 2009, he added.
Trade numbers are boosted by rising prices for the precious stones. Over the past decade, the price for a one-carat stone almost doubled, rising from $15,000 to $29,000, according to Ajediam,a diamond trader based in Antwerp.
A rise in the value of trading is expected to coincide with further growth in the number of market players in Dubai.
"This year we anticipate to capture well over 200 companies, which would put the total of diamond companies at 1,000," said Mr bin Sulayem.
Dubai acts as a gateway to the GCC consumer market, and the city benefits from its proximity to India, a large refiner of diamonds. It is also well positioned for Africa, where much of the world's diamond mining takes place.
Dubai's development as a global transport and logistics hub has also facilitated its position.
"I would not be talking to you about these numbers if the ports and airports had not expanded," said Mr bin Sulayem, whose father is the chairman of DP World.
The absence of a transaction tax on diamond trades has further helped Dubai's cause, allowing it to take market share from competing hubs such as Antwerp, the long-time centre of the world's diamond trade.
"I would have expected Antwerp to match what Dubai provides, to stay competitive, but I didn't see that. They hiked the tax rate, and big players that have always been committed to Antwerp are moving off now," said Mr bin Sulayem.
The DMCC's status as a global gold-trading hub also remains intact. Last year, Dubai accounted for 18.5 per cent of physical worldwide gold trades, according to Emirates NBD, and is expected to maintain this market share. Last year, 950 tonnes of gold were shipped from Dubai to India, the world's largest gold importer.
This article has been corrected since publication. Ahmed bin Sulayem's father is not the chairman of Dubai World as previously stated.