Demand boosts rough-diamond price

DE BEERS has increased rough-diamond prices by 16percent so far this year due to strong demand, the firm said yesterday.

DE BEERS has increased rough-diamond prices by 16percent so far this year due to strong demand, the firm said yesterday.

De Beers, 45percent owned by Anglo American, said last month it was cautious about developments in the second half due to a downturn in the US economy.

The firm's marketing unit, the Diamond Trading Company, has increased prices for rough, or unpolished, diamonds several times this year. The latest 16percent cumulative figure included a further increase this month. The DTC said last month it had increased prices by 5percent on top of previous price increases of 8,5percent this year.

''So far during 2008, DTC has seen strong consumer demand for most categories of polished diamonds, especially in the larger goods," Mahiar Borhanjoo, executive director of DTC sales and client services, said.

''The DTC takes a long-term, sustainable view on its pricing and decisions are influenced by demand."

Last month, De Beers said a difficult retail market in the US, which accounts for about half of all diamond jewellery sales, was dampening sales of cheaper, mass market items using lower quality gems.

Buoyant growth in China, India, Russia and the Middle East, however, was helping to balance some of the US impact, it said in July when releasing first-half results.

De Beers, which controls about 40percent of the rough-diamond market, posted a 10percent rise in first half rough-diamond sales to $3,3-billion (R26-billion) and increased its contribution to the underlying earnings of Anglo by 6.4percent to $166-million. - Reuters