De Beers Cuts Prices, But Not Seen as Going Far Enough

(IDEX Online News) – De Beers appears to have taken some steps towards accommodating sightholders with a small reduction in prices at its first sight in Botswana following the transfer of most DTC operations from London, according to reports.

Prices of rough goods of most types were down by 3-5 percent, while the average price cut across all ranges was 2 percent.

However, due to resistance from sightholders as a result of high prices of rough and almost flat polished goods, some had expected De Beers to go further in reducing prices.

“Given the state of the industry and poor margins, we had thought De Beers would reduce prices further,” said one sightholder. “The reduction is welcome but it is not going to help a great deal given all the problems we are facing.”

Indian diamond polishing firms say they are under particularly high pressure due to high rough prices, the sharp decline in the value of the rupee against the US dollar, and a lack of liquidity. Some reports say that almost one-third of Indian manufacturers, especially small and medium-size operations, are facing a tough outlook.

Gems and Jewellery Export Promotion Council (GJEPC) Chairman Vipul Shah said that most Indian manufacturers had started reducing production. “Rising prices of rough diamonds, currency fluctuations and limited finance options, with banks having become stringent, have recently had a severe impact,” he commented.