In a bid to address the growing surplus of diamonds resulting from a slowdown in global jewelry demand, Botswana’s state-owned Okavango Diamond Company (ODC) has taken the unprecedented step of suspending its rough diamond sales, Rough & Polished reports. This move is part of a broader industry-wide initiative aimed at reducing the inventory surplus brought on by the decreasing global demand for jewelry.
Okavango’s Managing Director is quoted by Reuters as saying: “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. For now, we have stopped the auctions; we will decide on the December auction.”
ODC raked in $1.1 billion in revenue in 2022. It typically conducts ten auctions annually to sell its 25% share of the production from Debswana Diamond Company. In 2022, ODC received an allocation of approximately 6 million carats out of the 24 million carats produced by Debswana. Following the recent agreement between De Beers and Botswana, ODC’s allocation is expected to increase to 7 million carats.
Recently, to counter the oversupply issue and support diamond prices during a period of diminished demand, trade organizations in India, responsible for processing and polishing approximately 90% of the world’s rough diamonds, have advised their members to suspend rough diamond imports for a two-month period.
