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Tight Indian Liquidity Slows De Beers Sales
Dec 13, 2016 4:39 AM
By Rapaport News
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RAPAPORT... De Beers revenue from rough diamonds declined sequentially to
$418 million in the final sales cycle of the year as tighter liquidity in India
hit demand for lower-priced stones.
Sales fell 12 percent at last week’s December sight from
$476 million in November, the miner reported. They were 69 percent higher than the $248 million recorded a year ago, when demand in the rough market had slumped.
Demand for smaller rough has slumped since the Indian
government invalidated INR 500 and INR 1,000 currency notes last month, drying
up activity in sections of the
cash-focused diamond trade almost overnight. The country accounts for a vast
majority of global diamond manufacturing.
The company allowed sightholders to defer their allocations
of diamonds costing under about $100 per carat in response
to the recent developments in India, sources told Rapaport News.
Even so, demand for larger and more expensive stones was
stable and prices were unchanged, sightholders said. Premiums on the secondary market are in the lower single-digit percentages, they added.
“While the trade in lower-value rough diamonds is
experiencing a temporary slowdown as a result of demonetization in India,
demand across the rest of the product mix continued to be healthy, and overall
sales remained in line with seasonal expectations,” said Bruce Cleaver, De
Beers chief executive officer.
De Beers rough sales jumped 36 percent to $5.58 billion this
year, according to Rapaport News estimates. Sales in the first half grew
12 percent to $3.03 billion, while second-half receipts leapt 83 percent to
$2.56 billion.
Sales figures include De Beers auction sales and supply
to beneficiation and government partners, in addition to the sights in
Gaborone, Botswana, which take place 10 times a year.
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Tags:
Bruce Cleaver, De Beers, Demonetization, India, Rapaport News, Rough Diamonds, sight, Sightholders, Sights
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