The Diamond Trading Company’s (DTC) December 2010 sight achieved an estimated value of $420 million as prices and assortments remained relatively stable. Ex-plan goods, or those not included in the original intentions to offer (ITOs), were supplied mainly to Indian sightholders.
The December sight, the tenth and final DTC sale of 2010, was shorter than usual, being conducted in just three days and did not include any presentations by the company.
Sightholders who spoke with Rapaport News suggested that rough demand is being stimulated by the Indian market, which is now back to full production following the Diwali break, while demand in Israel and Belgium is lower. Most sightholders expressed concern that rough prices will increase early in 2011, further squeezing their manufacturing margins.
One sightholder said he does not expect the DTC to raise prices until it has been able to conduct a complete analysis of the holiday season and predicted that a jewelry sales gain of more than 3 percent would increase rough prices.
“We cannot carry further price increases,” said another sightholder. “It’s just very difficult to profit at the moment.”
Including the December sight, DTC’s 2010 sales rose 48 percent to approximately $4.8 billion, according to Rapaport estimates, or 19 percent below the 2008 level.
The DTC also provided best business practice (BPP) guidance to sightholders on the issue of Marange diamonds, advising sightholders “not to purchase any diamonds from Marange that do not carry the authority of the Kimberley Process (KP).” The recommendation was offered in light of recent actions in India, where a consortium of buyers, including some sightholders, formed Surat Rough Diamond Sourcing (India) Ltd. (SRDSIL) and signed a $1.2 billion deal with Zimbabwe’s government. Under this agreement, Zimbabwe will provide the SRDSIL with a steady supply of rough in exchange for members of India’s industry training young Zimbabweans as cutters and polishers. The DTC said that while it supports any initiatives that promote the diamond manufacturing industry, such programs must not contravene any laws or bring the diamond industry into disrepute.
The company added, “If any of our sightholders, acting alone or as part of a consortium, is found to have purchased goods from Zimbabwe outside of the KP, then we would consider this a breach of BPP requirements, a consequence of which could be to remove that sightholder from our list.”
Article from the Rapaport Magazine - January 2011. To subscribe click here.