Sales at Okavango Diamond Company (ODC) dropped 16% to $260 million in the first half of 2018 due to a limited supply of rough, Reuters reported.
Sales volume declined 1.7% to 1.8 million carats, the Botswana-based trading company added in a statement to Rapaport News Monday. The state-owned company has access to 15% of the production from Debswana, the government’s joint venture with De Beers.
ODC was not “able to offer larger volumes [of] goods to our customers compared to the same period in 2017,” said Marcus ter Haar, the company’s managing director.
Major mining companies sold relatively low rough volumes in the first quarter, leading to greater competition for goods from companies in the midstream, ter Haar added. At the same time, “buoyant” diamond sales in the Far East and a positive US retail market drove demand for rough during the period, the executive said.
ODC held five spot auctions during the first half of the year, representing the majority of its sales. About 30% of sales by volume were from term auctions, an alternative selling method the company introduced last year that enables clients to bid for consistent supply over three regular sales cycles. ODC subsequently extended that program, offering goods over a seven-cycle contract period rather than only three.