Today (Wednesday) is the last day for Sight applicants to submit their DTC Questionnaires. An unknown number of diamond firms are applying for the three-year rough diamond supply contract amid shrinking supplies, an expected smaller number of Sight recipients, and shifts in DTC policies and focus.

 

Diamond traders – and their brokers, advisors, consultants, and marketing firms – have been frantic, busily preparing their answers for the questionnaire, the new version of what was formally called the profile.

 

In recent weeks, the DTC has said that it is shifting its emphasis, some will say demand, from Sightholders, from downstream activities and heavy involvement in marketing activities to ‘adding value’ and selling the goods efficiently.

 

The shift, from the criticized Supplier of Choice (SoC) to SoC2, may elude those that read the questionnaire. Many of the questions are about marketing activities, which has baffled a number of applicants.

 

Another element of the questionnaire is a request from applicants to explain, in great detail, what they are going do with their entire supply, leaving little room, if any, for unplanned sales activity.

 

DTC managing director Varda Shine told Sightholders that in the next contract period the company expects to have less Sightholders due to decreased availability of goods, and supply obligations in southern Africa.

Sightholders understood this to mean that very few new companies will join the ranks, while a large number will lose their Sight. The result is that most of the current 93 Sightholders are feeling insecure about the future.

 

The rest, larger companies that have polishing activities in Botswana and Namibia, feel fairly secure they will remain on the list.

 

It should be noted that there is a certain chance that in Namibia some may receive an allocation without being a Sightholder. Namibia wants to supply local manufacturers, and a number of companies – that are not applying for a DTC Sight – have received a polishing license.

 

Meanwhile, one company decided to not apply for a Sight at all. Premier Diamond Cutting Ltd, a Bangkok-headquartered diamond and jewelry manufacturer, announced Tuesday that, following a strategic review, it is “arranging for supply from other outside rough sources.”

 

The next contract period will start in March 31, 2008. Companies that will lose their Sight will be supplied with rough diamonds for another three Sights, giving them about three months to find alternative sources.

 

During this three-Sight period, all successful applicants will be checked by a third-party verification company. DTC warns that any company found to have submitted false information that materially affects their selection to become a Sightholder, may not have their status as a Sightholder confirmed for the new contract period.

 

Currently, prices of DTC boxes are traded with high premiums. Sightholders expect prices will remain strong in the coming months for most of the goods.

 

(Last update July 18, 2007, 10:34 am EST)