Surat: Shrinking profit margins , weak demand of lower-value goods and high rough diamond prices in Surat has put pressure on the profit margins of De Beers in the second consecutive month.The sale of rough diamonds by De Beers witnessed a decline in the second consecutive month by almost 13% compared to 25% in the previous month in 2019.According to US-based Rapaport group, De Beers reported sale of sale of $490 million in February, which was 13% below a year ago amid weak interest in lower-value goods. De Beers mainly kept prices steady, prompting concerns from clients, many of whom had been hoping the company would make adjustments to ease pressure on the market.Citing concerns from the De Beers clients from India, Rapaport noted that that the manufactures feel that the prices should have gone down because the margins are not there. It has been almost one year and that the manufacturers are unable to make profit due to high cost of rough diamonds.“Instead of reducing prices, De Beers held back goods, aiming to deal with an oversupply problem in the polished sector” Rapaport quoted a sightholder from India.“The miner hasn’t brought prices down significantly since November when it discounted its cheaper goods as tight Indian liquidity affected demand. However, since then, polished prices for small diamonds and below have fallen 15% to 20%, while prices of some higher-clarity small goods have declined 5% to 8%” the sightholder noted.The rough market has been weak since the start of the year as disappointing holiday retail sales led to slower-than-usual restocking. That has hit De Beers’ top line, with rough diamond revenues down 20% to $990 million in the first two sales of this year, according to Rapaport calculations. January proceeds fell 26% to $500 million, restated from an earlier figure of $505 million.De Beers CEO Bruce Cleaver said, “Demand for rough diamonds remained consistent during the second sales cycle of 2019. While overall demand for lower-value rough diamonds remains subdued, we did see an increase in demand from India as factories begin to restock.”

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