By Eric Onstad

LONDON, April 20 (Reuters) - Rough diamond prices are likely to correct after a scorching rebound, but the long-term outlook is bullish due to future supply shortfalls, a diamond expert said on Tuesday 20 April.

Prices of rough or unpolished diamonds collapsed in late 2008 and early 2009 when consumers shunned luxury goods during the global downturn, but a strong rally has taken them above the peaks of 2008, consultant Charles Wyndham told a diamond conference.

"Common sense would suggest that there has to be some sort of correction in rough (diamonds)," said Wyndham, co-founder of WWW International Diamond Consultants.

A brief decline would be healthy after the heady climb that saw prices jump 82 percent from trough to peak last year, said Wyndham, also chairman of Polished Prices.

"A correction doesn't mean that it goes down and down, a correction would be temporary and then it picks up ... the trend lines remain positive, very positive."

A long-term upward trajectory would be supported by the impact of a lack of major new mines being discovered.

The financial downturn has delayed the onset of a supply squeeze by about five years to 2015, he said. Before the financial crisis, demand was expected to outpace supply by this year.

Virtually no discoveries of huge diamond mines have been made in recent years and most of the small to mid-sized mines being developed are still years away from launching production.

"There is a long-term imbalance between supply and demand ... it's not a question of if, but a question of when," he told the conference.

Man-made diamonds may help fill a shortfall and should not be seen as a threat by miners, but as an opportunity. "I think one of the real risks that the industry faces is that the shortfall might be too great and that if you don't have your product on the shelf, there's a real risk that people start buying other things," Wyndham said.

Wyndham was a director of the marketing arm of De Beers, the world's largest diamond producer, before leaving in 1995 to start his own business.

Besides De Beers, 45 percent owned by mining group Anglo American (AAL.L), major diamond producers include Russia's state-owned Alrosa, Rio Tinto (RIO.L) (RIO.AX) and BHP Billiton (BLT.L) (BHP.AX).

(Reporting by Eric Onstad; Editing by Rupert Winchester)