De Beers, has abandoned its $4.8 billion sales target for the full year and will focus on restoring stability in the market, the Financial Times (FT) reported Tuesday.
The decision follows a meeting last week between its Diamond Trading Company (DTC) and a delegation from Antwerp including the High Diamond Council (HRD), banks and the larger diamond dealers, FT reported.
The move may signal a return to De Beers’ traditional role as custodian, and comes months after it made a strategic decision to become more retail-oriented.
De Beers revealed its intentions at a second meeting in Antwerp on Monday with diamond brokers, FT reported.
Peter Gross, head of ABN Amro’s diamond division in Antwerp, said the decision was a direct result of last week’s meeting, FT reported.
Peter Meeus, HRD director, told the FT on Tuesday: “We spoke clear language and I am happy to hear the news.”
De Beers, which controls about two-thirds of global rough diamond supplies, decided to limit supply to the market at the last allocation or “sight” in Belgium in the second week of July, when it excluded 12 sightholders, or approved dealers.
The company said it was aware of the difficulties in the rough and polished markets and would continue making adjustments to its assortments to suit market conditions, FT reported. “But De Beers is not prepared to comment on its sales target policy,” it said.
Diamond trading in Antwerp has slowed down substantially compared with India, where polished business for goods under $200 remains strong.
Sightholders expect De Beers’ August sight to be considerably lower than July’s, which is estimated at about $325m. The August sight is traditionally lower than July’s but one DTC-dealer said: “We expect an extraordinary small sight.” Speculation is growing over whether De Beers can continue its Supplier of Choice programme, the pillars of which are distribution efficiency, best business practices and transparency.
The programme’s launch has been postponed pending investigation by European Commission competition authorities.
Meanwhile, latest figures from the HRD showed an 11% fall in first-half turnover to $12.1 billionn, compared with the same period last year, FT reported. Imports into Antwerp fell 17.7% to $3.4 billion, while exports fell 22.8% to $3 billion. This was mainly a result of excess polished inventories, it said.
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