- March 30, 2020
- Posted in LOCAL
DE BEERS has cancelled its third sight for the 2020 financial year owing to travel restrictions placed on buyers as a result of COVID-19.
Anglo American, which owns 85% of De Beers, said in an announcement that sightholders would be able to defer all of their third sight allocations to later in the year. It would “… continue to seek innovative ways to meet sightholders’ rough diamond supply needs in the coming weeks,” it said.
The travel restrictions are “… on the movement of people and products in Botswana, South Africa, and India, which prohibit customers from traveling and prevent the shipment of goods to customers’ international operations,” Anglo said.
Cancelling the third sight for this year is hardly a surprise given the way governments have ratcheted up their efforts to contain the spread of the virus in the last week, including a decision by the South African government to embark on a 21-day near total shutdown from March 27. De Beers had initially intended holding its sight however.
The COVID-19 outbreak has come at a terrible time for the diamond industry following poor trading conditions in 2019. De Beers made its smallest profit in more than a decade last year after a glut of rough and polished stones destroyed margins for the industry’s crucial middlemen who cut, polish and trade them, said Bloomberg News.
Early evidence that 2020 diamond sales were off to a poor start owing to travel interruptions was provided by GEM Diamonds which said on March 19 that it had replaced a tender for its large diamonds with a “flexible direct sale process” in mitigation of travel bans on buyers.
Last week Petra Diamonds brought forward the closure of its fifth sales tenders in South Africa and Antwerp three days earlier than the planned March 26. It also found “depressed and opportunistic” bidding for its goods, particularly in the larger size and higher quality, greater categories.
Gemfields said on March 24 that it could not provide a forecast for its financial performance in the current financial year as COVID-19 related travel restrictions prevented auctions of rubies and emeralds from taking place.
“Due to the current global travel restrictions the company cannot be certain when or if the ruby and emerald auctions scheduled for the coming months will take place,” it said in notes to a trading statement which showed a strong recovery for its 2019 financial year.