The Okavango Diamond Company (ODC), the state-owned rough diamond trader in Botswana, has announced the cancellation of its December sale, following a similar decision for November.
The cancellation was communicated to customers via email, indicating the cancellation of both the rough viewings scheduled for 3-13 December and the spot auction set for 16 December. The decision reflects ongoing challenges faced by the diamond industry due to weak demand.
Market Adjustments and Industry Impact
ODC’s decision follows a broader trend of reduced sales activities by diamond producers as they respond to an oversupply in the midstream sector. De Beers, a joint venture partner in Debswana with the Botswana government, recently combined its August and October sights into a consolidated trading session in September to balance supply and demand amidst current soft market conditions.
Auction Plans and Strategic Shifts
Despite the cancellations in November and December, ODC will proceed with its October auction, with viewings already underway ahead of the sale scheduled for 7 October. The company has stated on its website that auction dates will be confirmed on a “sale-by-sale basis,” citing “current market conditions” as the reason. This approach indicates a cautious strategy in response to demand fluctuations, a situation the company has previously managed through similar postponements.
Expanding Sales Rights and Future Outlook
ODC’s current position in the diamond market is supported by its right to sell 25% of the rough diamonds produced by Debswana. This quota is set to increase to 30%, with potential to reach up to 50% under the new sales agreement between De Beers and the Botswana government. Such an increase could significantly impact ODC’s market share, but it also highlights the need for the company to effectively navigate shifts in global demand for diamonds.
