Despite recent promising signs of diamond market recovery, state owned company – Okavango Diamond Company (ODC) says its sales took a knock in the last three rounds of sales.
Managing Director Mmetla Masire says even though ODC started the year on a high there are however challenges which recently stunted their sales.
Masire stated that even though there has been a decline in diamond sales as evidenced by the last three sales they are however still profitable.
Okavango Diamond Company which was established in 2012 is a wholly state owned diamond marketing and sales company tasked to sell Botswana diamonds outside De Beers price book channels and operations.
Masire highlighted that although recovery signs were promising to last longer they now find themselves having to bear the brunt of the challenges.
“The diamonds recovered quickly before Covid-19 situation improved, so last year as you know we did very well as a company and as an industry and this year started very good but what we are starting to see now is the drop in prices although we are still profitable but we have seen a decline in the last 3 sales,” said Masire.
He further said their assessment has revealed that there are 3 factors which have led to the decline of diamond sales.
He said the increase in inflation rate across the world can be attributed to the decline in diamond sales also adding that the Ukraine-Russia war has also thrown the economic into hardships.
“The inflation rate has increased owing to the Russia-Ukraine war and this has left many economies struggling as you can also see with the high food prices even locally and some diamond buyers may be facing a recession very soon,” he said.
Masire stated that another factor is that owing to the high purchase early this year, some people’s money is still locked up in stock as some buyers failed to process the stock and sell.
He continued to indicate another factor could be that this is an off season for buying diamonds due to the looming end of year holidays.
“We are working around the clock to ensure that we devise different strategies to ensure that our diamonds remain relevant and one of the strategies is to ensure that we provide a product that is more appealing compared to other suppliers and that is what we are currently doing because there is nothing you can do about world recession to a certain degree,” added Masire.
Masire said if the factors were internal problems within the industry then it would be better to strategise to overcome the challenges.
“Our next financial year is next year in March and we believe that we will have a better year but then again we are hopeful that once the money held in stock is released then the market will improve but what we cannot predict is the global inflation because we do not know how long the Russia-Ukraine war is going to take and how much is going to impact on global recession,” said Masire.