State-owned Okavango Diamond Company (ODC) has decided to temporarily suspend its rough diamond sales to alleviate the surplus of inventory resulting from declining global jewellery demand.
“For the first time, we have had to build up inventory as we do not want to just irresponsibly release goods into a market, which is already oversupplied," company managing director Mmetla Masire was quoted as saying by Reuters.
"For now, we have stopped the auctions; we will decide on the December auction."
The move is part of an industry-wide effort to reduce the inventory glut caused by a decline in global demand for jewellery.
ODC, which generated a record-breaking $1.1 billion in income in 2022, conducts 10 auctions per year to sell its 25% share of production from Debswana Diamond Company.
ODC received an allocation of approximately 6 million carats of the 24 million carats that Debswana produced in 2022.
ODC's allocation is about to increase to 7 million carats by a new deal between De Beers and Botswana.
“We are still to decide on what percentage of our allocation will be sold through contract sales to complement our auctions," he said.
"We are likely to have two-year sales contracts and we are looking at going into partnership with only a limited number of buyers so that we can better serve them.”
To limit supplies and assist prices in the face of poor demand, trade organisations in India, which processes and polishes 90% of the world's rough diamonds, advised members to suspend rough diamond imports for two months last month.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
