The Christmas buying season for diamond jewellery is expected to be healthy and should help clear a backlog of rough gems that put a damper on the sector this year, an industry official said on Friday.
"The fundamentals are very strong. The overall situation is very positive," Eli Izhakoff, chairman of the World Diamond Council, told Reuters during a visit to the Orapa diamond mine in Botswana. "I think it will be slightly better (than last year)," he said in an interview when asked about the Christmas season. The economy is relatively healthy in the United States, the world's biggest consumer market for diamond jewellery, and signs were also positive in China and India, he added.
De Beers's marketing arm, the Diamond Trading Company, trimmed its prices in June as rough demand remained sluggish due to stockpiles of unsold rough diamonds, a DTC official told Reuters last month.
Izhakoff, who also runs a family diamond business in New York, said the downturn in prices of rough or unpolished gems was not across the board, but in certain categories.
But a strong Christmas season should bring down stocks on the retail side, sparking a wave of restocking throughout the diamond sector pipeline. "That should help clear up that congestion," he said. The DTC boosted prices early in 2006 after three price hikes last year, but decided to cut prices marginally in June when faced with a sluggish market, the head of DTC Botswana said last month.
The prices of rough gems rose faster than the price of polished diamonds, leading to an imbalance in the market and a build-up of stocks.
Last year, De Beers, which controls around half of the rough diamond market, posted record sales of $6.54 billion. De Beers is 45 percent owned by mining group Anglo Amercian Plc, 40 percent by the Oppenheimer family and 15 percent by the Botswana government.