Rarity - Methodology

Introduction

Diamonds have been unearthed in various parts of the world for centuries. In recent years, advancements in technology have enabled us to extract diamonds more quickly, deeply, and with less damage to the recovered stones. Despite these innovations, a few factors remain unchanged: the finite supply of diamonds in these deposits, and the ratio of sizes, clarities, and colors of fancy color rough diamonds. In other words, in the past decade, miners continue to uncover the same proportions of small versus large diamonds, as well as colorless versus fancy color diamonds, although the process has become more efficient.
Out of 33 million carats of rough, only a fraction of a percent are Fancy Color Diamonds. Most of these will not pass through the GIA laboratory, as they are too small to require a grading report for trade. Diamonds that do undergo the grading process represent approximately 3% of all diamonds submitted to the GIA each year.
From ongoing interviews with our data suppliers, the FCRF concludes that over 99% of all traded Fancy Color Diamonds with a geological report have passed at least once through the GIA lab. Therefore, the GIA data, driven by their intake, forms the foundation for our database, as well as other proprietary FCRF research.

Methodology

Flaws in natural rough diamonds are a result of natural processes. However, because these flaws can be controlled during the polishing process, the market tendency is to produce diamonds with higher clarity grades, often at the expense of a higher carat yield. As a result, some Fancy Color Diamonds with lower clarity grades will be less abundant compared to similar diamonds with higher clarity grades.

Table of Contents

The FCRF

We are a non-trading organization dedicated to strengthening trust across the entire supply chain of natural fancy color diamonds—from mine to collector. Our research, methodology, and technology provide the foundation that empowers professionals to become trusted experts when buying or selling natural color diamonds. Furthermore, our work extends to the consumer, building trust at every stage of the diamond journey, and enhancing their marketability and value.

Industry Standard

Fancy Color Diamonds, whether loose or set in jewelry, are accompanied by a GIA report. This report provides grading data, including carat weight, color and clarity, cut parameters, dimensions, fluorescence, and a plot of the stone. However, none of the gem reports include rarity data.

Rarity Factors

Fancy Color Diamond rarity is determined by two key factors: natural circumstances and human decisions made during the planning and polishing process. The natural factors determine four key characteristics:

  • The size of the rough
  • The hue
  • The intensity
  • The inclusions the diamond will contain

It’s important to note that the planning of the polished diamond can impact its intensity, clarity, and size.

Size

The average size of rough diamonds is approximately 0.3 carat, which results in an average polished diamond size of around 0.01 carat. Most rough diamonds are not unearthed in their original form. In fact, the vast majority of rough diamonds are merely fragments of much larger octahedral diamonds that were either eroded or broken during their long ascent from the depths of the earth to the surface.

Shapes

Diamond shape is an important factor in determining rarity. Some polished diamond shapes are more common, while others are much rarer. Typically, manufacturers will aim to cut a shape that yields the largest possible diamond. However, certain shapes may yield smaller diamonds but are considered more commercially valuable. Color retention plays a key role in shape selection for fancy color diamonds. For example, round brilliant cuts tend to have the lowest color retention and are therefore the least commonly produced, making them the rarest among all Fancy Color Diamonds. Similarly, emerald cuts (or step-cuts) also have relatively low color retention and are considered rare for this reason.

Other shapes, such as pear, heart, oval, radiant, and cushion, are produced more frequently, with radiant and cushion cuts being the most abundant. These shapes are often the best match for the typical shape of most rough diamonds.

Shapes – Outliers

Signature cuts such as shield, kite, and rose cuts, along with other unusual shapes, are produced in smaller quantities and are even rarer than emerald or round brilliant cuts. However, these shapes are considered less commercially viable, and as a result, their value may not always align with their rarity.

The Cause of Hue

Hue and intensity are the result of rare natural circumstances. A rare accumulation of nitrogen during diamond formation, combined with the diamond’s age, results in a yellow hue. Prolonged exposure to radiation alters the atomic structure of the diamond, creating a green color. Diamonds formed at extreme depths in the earth may contain boron, resulting in a blue color. In the case of pink diamonds, immense pressure during formation deforms the atomic structure, bending the light passing through the diamond to create a red hue. All of these natural phenomena occur only in very rare cases.

Intensity

The GIA’s color saturation grade reflects natural circumstances, but in many cases, decisions made by the manufacturer can either enhance or reduce the saturation level of a Fancy Color Diamond, especially in borderline cases.

For example, if a round brilliant cut is selected, it often results in a lighter visual performance compared to a modified fancy shape cut for the same diamond. This difference can lead to up to two intensity grades in favor of a modified square diamond (e.g., a Fancy Light Yellow round brilliant could have been polished to a Fancy Yellow, or even an Intense Yellow, if cut as a modified square).

While the round brilliant cut will increase rarity due to its shape, it may degrade the rarity result due to the lighter saturation grade.

Intensity – Outliers

In all color categories, “Fancy Deep” and “Fancy Dark” diamonds tend to be rarer than most other intensity levels, simply because they are found less frequently in nature. However, in these two specific saturation levels, rarity does not always align with demand or value, and these results should be presented with careful explanation.

Inclusions – General

Inclusions in diamonds are a result of natural processes. These inclusions, like insects trapped in amber, were formed during the diamond’s crystallization. Scientists view diamonds containing inclusions as “time capsules,” preserving a moment in time from when the diamond was created.

Inclusions – Rarity

In terms of rarity, clarity is viewed as a natural consequence, with clarity grades applied once the diamond reaches its final form. However, clarity can also be influenced by human decisions during the polishing process, affecting rarity at the expense of weight or shape. In most cases, the difference in clarity grades is a result of slight weight variations. As each 1/100th of a carat removed from a diamond reduces its price, the benefit of a higher clarity grade doesn’t always outweigh the economic considerations of polishing.

Inclusions – Outliers

Over the past two decades, market forces have incentivized manufacturers to prioritize higher clarity grades (SI1 or higher) for Fancy Color Diamonds, often yielding smaller diamonds in the process. Consequently, Fancy Color Diamonds with lower clarity grades (SI2 and lower) are entering the market in smaller numbers compared to their higher-clarity counterparts. This is especially true for Pink and Blue Fancy Color Diamonds, as they offer higher profitability.

Due to these economic incentives, Fancy Color Diamonds with low clarity may exhibit higher rarity grades in some categories. However, these rarity results do not always correlate with the diamond’s market value and should be explained accordingly.

Final Consideration

It is important to remember that rarity is primarily the result of natural circumstances. However, we must acknowledge that manufacturing decisions also influence the rarity outcome. Occasionally, incorrect manufacturing decisions may result in a lower rarity grade. Nonetheless, in most cases, we assume that optimal manufacturing decisions are made to yield the most valuable diamond possible.

What Lies Behind the Rarity Results

Before the establishment of the FCRF, no other entity had undertaken the task of collecting, analyzing, and publishing data on the average number of Fancy Color Diamonds entering the market each year. This lack of knowledge was widespread within the industry and beyond.

We believe that rarity data plays an important role in “storytelling” for Fancy Color Diamonds. Due to the multitude of variables involved, it is difficult to determine exact rarity numbers. However, it is possible to express rarity as a range, which provides an accurate picture. Thanks to the multilayered data collected and analyzed by the FCRF, we can now estimate the approximate yearly frequency of certain Fancy Color Diamonds in various colors and sizes—information that was previously unavailable.

The Way We Present the Rarity Results

The FCRF rarity results are always presented as ranges because the exact number of Fancy Color Diamonds unearthed cannot be precisely known. Any attempt to present exact numbers would be flawed. The range results are divided into two formats:

  • For diamonds that appear on average at least once a year, we express rarity as “x to y times per year.”
  • For diamonds that appear on average once every two years or more, we express rarity as “once every x to y years.”

Weight Categories

Rarity results are categorized by carat size. Some weight categories are grouped together to avoid inaccuracies and represent similar price categories.

Size Category / Carat Size

  • 1-1.49, 4-4.99, 10-10.99, 20-24, 50-59, 90-99
  • 1.5-1.99, 5-6.99, 11-13, 25-29, 60-69
  • 2-2.99, 7-7.99, 14-16, 30-39, 70-79
  • 3-3.99, 8-9.99, 17-19, 40-49, 80-89

Clarity Categories

The impact of clarity grade in Fancy Color Diamonds is relatively minor compared to colorless diamonds. The categories are based on their impact on manufacturing decisions and demand.

Clarity Categories:

  • Flawless or Internally Flawless
  • VVS1 or VVS2
  • VS1 or VS2
  • SI1
  • SI2
  • I1, I2, I3

Where and How We Collect the Data

We collect and cross-reference data from various sources:

  • Extensive GIA research based on their intake
  • A proprietary FCRF mining survey
  • Ongoing online analysis of tens of thousands of color diamonds
  • Periodic surveys with FCRF data suppliers

Rarity in Regards to Value

While rarity is often associated with value, the FCRF Rarity Report is not designed to directly indicate the value of a Fancy Color Diamond. Although rarity is a key factor in determining value, it is not the sole determining factor. Other variables, such as quality, beauty, and demand, also play crucial roles.

In some cases, rarer diamonds may not command higher values due to factors like shape, color, or market demand. The FCRF Rarity Report should therefore be viewed as an additional layer of information rather than the only determinant of value.