2019 set to sparkle
FILE PIC: Orapa Mine

De Beers predicts positive consumer demand

De Beers, the Botswana government’s partner in Debswana, predicts positive global consumer demand in the main diamond consuming markets in 2019.

However, addressing the media recently, De Beers Executive Vice President – Diamond Trading, Paul Rowley said although demand is expected to be positive, challenges remain. He cited macroeconomic instability and exchange rate volatility as two such examples.

De Beers relies mostly on sales in the U.S.A, China and India, which are the leading markets for De Beers’ diamonds.

Further obstacles likely to impede diamond trade this year include the risk of a potential escalation of the US-China trade tensions, as well as the Chinese government’s ability to rebalance economic growth towards consumption.

Consumer demand trend is anticipated to carry on from last year when conditions are said to have been generally supportive, especially in the mainstream.

According to Rowley, indications are that there will be a slight increase in demand for better quality smaller diamonds. However, he predicted it will take time for the sector dynamics to rebalance fully in this area.

Production at De Beers in 2019 is expected to fall in the range of 31 – 33 million carats, subject to trading conditions.

Increased proportion of production is anticipated this year from De Beers Group’ Joint Venture partners which include Debswana.

In 2018, Debswana produced a total of 24.1 million carats, a 6 percent increase from 22.7 million carats mined in 2017.

Rowley also revealed De Beers will be stepping up its marketing activities this year.

Having spent around US$166 million in marketing activities last year alone, he says the figure will be increased further this year. Last year’s total is reportedly the highest the diamond company has spent in more than a decade.

These activities will include investments in proprietary brands and Diamond Producers Association, an initiation of leading diamond producers to support category marketing of diamonds in key consumer markets.

In an effort to ensure a sustainable future for the industry, De Beers is currently piloting a diamond tracking initiative called TRACR.

This is said to be the first diamond blockchain platform which digitally traces a diamond from mine to retail.

Executive Vice President – Commercial and Partnerships at De Beers, Alessandra Berridge explained that this will enhance consumer confidence in diamonds by ensuring all registered diamonds are conflict-free and natural while also improving efficiency across the sector.

So far, the blockchain has reportedly tracked more than 200 high-value diamonds along the value chain.

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