JNA Jan/ Feb 2021

SPECIAL FEATURES 12 | JNA Jan/Feb 2021 interactions at international fairs or client visits. The trade will only be able to resume operations once these in-person exchanges are made possible again,” remarked Sabbagh. The diamond sector was among the hardest hit during the peak of the global outbreak. Yoram Dvash, president of World Federation of Diamond Bourses, said Covid-19 impaired the market’s ability to conduct person-to-person dealings, which is the crux of the diamond business. The impact was all-encompassing, affecting the entire supply chain from mine to retail. End consumers were likewise averse to buying luxury items such as jewellery. With rising Covid-19 cases and governments implementing stricter lockdown and social distancing policies, the jewellery retail sector around the world took a beating, stated Dvash. Data from mining giant De Beers showed that its rough diamond sales in cycles 1 and 2 of 2020 reached US$545 million and US$355 million respectively, but by March – when the virus was beginning to wreak havoc on the global economy – De Beers cancelled its third auction and allowed Sightholders to defer up to 100 per cent of their allocations. By comparison, the miner sold just US$56 million in the second quarter due to travel restrictions, weak consumer demand and diminished cutting and polishing capacity in the midstream. De Beers only started making marked strides in rough diamond sales from August when auction results reached US$320 million as restrictions in various locations were eased and consumer sentiment began to pick up. The miner achieved sales above US$400 million from three consecutive sights held in September to December, driven by steady demand for rough diamonds and diamond jewellery at the retail level, primarily in the US and China. Amid de-stocking in the mid-market and the downstream segments, De Beers is looking to produce fewer diamonds in the next two years to avoid overstocking in the industry. Production outlook in 2021 was reduced to 33 million to 35 million carats from 34 million to 36 million carats; and 30 million to 33 million carats from 33 million to 35 million carats in 2022. Production guidance for 2023 is 30 million to 33 million carats. The absence of international jewellery exhibitions meanwhile was especially detrimental to the pearl sector, according to Jonathan Cheng, director of Hong Kong- based Rio Pearl. “The year 2020 has been very challenging for everyone. In terms of business, there were no opportunities such as large-scale fairs to help push We should see some recovery in the first quarter of 2021, given the current momentum and consumer sentiment. I’m banking on China fueling the consumption business. – Lawrence Ma, president of the Diamond Federation of Hong Kong, China