De Beers Boosts Rough Prices

February 17, 2000

De Beers Boosts Rough Prices

De Beers has announced a price increase for rough diamonds beginning with its next sight allocation, Feb. 21. "The increase is small, only in the single digits," says Andy Lamont, a De Beers spokesperson. "It's a response to strong demand, especially in the United States." A shortage of certain goods, particularly diamonds traditionally polished in India, is another reason for the increase. "These factors are exerting an upward pricing pressure on smaller, cheaper goods," Lamont says.

In October, De Beers announced it would like to reduce its stockpiles to increase the value of its shares. Lamont says there is no correlation between that stated desire and the price increase. "What we have instead is good news, really," he says, "because it reflects U.S. demand."

Lamont expressed optimism about demand in Europe and cautious optimism about the Far East, particularly Japan. "The Japanese have unfortunately been hammered by the currency factor," he says. "Diamonds are traded in dollars, and the Japanese yen has lost ground against the dollar."

This month, De Beers also set a sales target of $5.3 billion for 2000. The figure is said to be a bit higher than 1999's, which eclipsed the $5 billion mark. In 1998, De Beers reported an 11-year low of $3.3 billion in sales because of the economic downturn in the Far East.

- by Robert Weldon, G.G.