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De Beers’s diamond buyers continued to take the rare opportunity to reject stones from the biggest supplier as the company extended almost unprecedented flexibility to ease a growing crisis.
De Beers’s diamond buyers continued to take the rare opportunity to reject stones from the biggest supplier as the company extended almost unprecedented flexibility to ease a growing crisis.

De Beers diamond sales fall 39% in a year

RETAILER NEWS

By Thomas Biesheuvel - Oct 3rd, 09:28

De Beers’s diamond buyers continued to take the rare opportunity to reject stones from the biggest supplier as the company extended almost unprecedented flexibility to ease a growing crisis. 

De Beers sold just $295 million of diamonds this month, 39% less than a year earlier. The sale is the latest in a series of weak offerings as many customers have refused to buy amid concerns they couldn’t make money on the rough diamonds. The Anglo-American unit’s sales this year are down more than $1 billion from the same time in 2018.

De Beers sells its gems through 10 sales each year in Botswana’s capital, Gaborone, and the buyers - known as sightholders - generally have to accept the price and the quantities offered. The sightholders are given a black and yellow box containing plastic bags filled with stones, with the number of boxes and quality of diamonds depending on what the buyer and De Beers agreed to in an annual allocation.

This year, buyers have grown increasingly frustrated with the cost of rough diamonds sold by De Beers as the prices of polished gems slumped. That’s led to wafer-thin margins for their buyers and in some cases losses from the stones bought from De Beers and Russian rival Alrosa PJSC.

The industry’s problems are centered around an oversupply of polished diamonds that have led to much steeper price drops than for rough stones. At the same time, tighter bank financing and currency fluctuations have hurt traders, cutters and polishers.

De Beers has responded by allowing buyers to refuse half the stones in each parcel offered and also to sell back some diamonds to the company on favourable terms, according to people familiar with the situation.

“As we approach what is traditionally a quieter time of year for the diamond industry during the Diwali holiday, we have again offered our customers flexibility during this sales cycle,” De Beers Chief Executive Officer Bruce Cleaver said.
Fin24 

Read more about: sales | diamonds | de beers | business

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