The 2019 Pipeline

(idexonline.com) - The 2019-2020 period is evolving as a dramatic game changer for the entire world. This is even more so for the diamond industry where a gradual pipeline restructuring process finally matured into an inevitable and, in fact, a most desirable conclusion for the midstream sector - the manufacturers of the rough and the traders of the polished. Finally, this quite squeezed sector from a profitability aspect, began to act purely in their own economic, financial, and commercial self-interest less burdened by producer pressures to “relieve” them of their stocks. Led by the massive Indian diamond sector, the manufacturers put four months break on their rough diamond purchases. In 2019 the producers were faced with considerable resistance to purchase their rough allocation which was met, to quote the CEO of De Beers, “with unprecedented flexibility in the way it sold its diamonds to sightholders because of the nature of the market”. In February 2020, well before the pandemic struck the world in full force, the heads of both De Beers and Anglo American announced that they would change their allocation system (sights) and that no buyer will be “unaffected” by the changes in the sight system. The Indian industry didn’t wait to find out what scheme the producer would introduce.