DIAMOND PAGE — Asian economic woes hurt CSO diamond sales

De Beers Consolidated Mines (DBRS-Q) earned US$4.64 billion in 1997 from sales of rough diamonds, compared with a record US$4.83 billion in the previous year.

De Beers sells its diamonds, and other companies’ stones, through its Central Selling Organization.

Sales for the first half of 1997 topped US$2.88 billion, which represents a record for any six-month period of the last decade. Trading, however, was hindered in the final half of 1997 by lower demand in Japan, South Korea and several countries in economically troubled Southeast Asia. As such, the CSO’s sales of US$1.76 billion were 16% lower than the US$2.09 billion realized in the same period of 1996.

Although De Beers begins the new year with uncertainty in predicting future demand from those Asian markets which remain depressed, the company believes strong sales to the United States, which is the major market for diamond jewelry, will continue. As well, the company’s control over the supply side improved in the past year as production in Angola and sales of Russian stockpiles fell from 1996 levels.