Friday, October 30, 2020

Cautionary optimism in the wake of improving diamond demand

Debswana’s increased diamond production during 2013 to a modest 10 percent of 22 million carats augurs well with improved US holiday demand and Chinese New Year’s great expectations euphoria, De Beers Group CEO, Philippe Mellier said.

Mellier stated that during the 2014 financial year, the industry was “cautiously optimistic” about prospects in the diamond market given the positive outlook for diamond sales in 2014 after 2013’s lukewarm demand.

“There are good signs coming from the US economy, with improved demand in evidence over the holiday period,” he said recently.

“Looking East to China, there are also healthy signs with a positive outlook for sales around the Chinese New Year and expectations for a continuation of strong economic growth, at around the same levels seen in 2013.”

He said that De Beer’s January sight will be the third in the 120-year history of the company to be held in Gaborone following the relocation of its sales function from London November 2013.

According to Mellier, most markets for Botswana diamonds were flat on the back of the sluggish global economic conditions while the Indian market, the largest cutting and polishing centre in the world, has been hit hard by exchange rate and liquidity constraints.

De Beers gets between 60 and 70 percent of its annual production from Debswana mines with the remainder coming from Namibia, South Africa and Canada, Mellier revealed.

Warning against “cautionary optimism”, the Group CEO said that despite solid prospects for India in 2014, there still remain some concerns about inflation and currency volatility in the short term.
Mellier emphasised the importance of forging relationships and best practice smart partnerships in the diamond industry and how the associations work giving the De Beers/Botswana 40 years relationships with sightholders and consumers, as living testimony.

He stated that the relationship with sightholders has been central to key developments in the history of diamonds like beneficiation or growing demand in new consumer markets.

Citing the importance of relationships evolving and adapting, he stated that De Beers has been listening to sightholders’ views and is looking at a number of ways to strengthen future relationships. The market was in 2013 awash with speculations of a frosty relationship between De Beers and sightholders, who were reportedly unhappy with the company’s pricing policy.

“Perhaps the most important relationship is the one between the diamond industry and consumers. Ultimately, a consumer’s desire for diamonds is the only true source of value in the industry. If we continue to nurture the relationships on which our success is based, then we will also make sure that diamonds remain the symbol at the centre of a consumer’s desire,” Mellier said.

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