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To: HG who wrote (89588)	1/3/2000 11:28:00 PM
From: Glenn D. Rudolph	Respond to of 164684

I thought De Beers sold uncut/rough diamonds only, and they had that selling system in place where the buyers have to buy in lots or bunches which have been put together and buyers cannot negotiate or authenticate...??? I suppose its to reduce overheads and liabilities. Am I wrong ??? HG, You are correct regarding all parts of the De Beers operations. De Beers controls the diamond supply by selling the rough only through their CSO (Central Selling Organization). The CSO sells lots with various mix of rough without permitting the buyer to inspect the lots. Typical lots last time I looked were about $15 million. I buy finished goods so do not get involved with buying rough. Please see the following news article. "De Beers Reports Record Rough Diamond Sales By John Gallagher Associate Editor Web Posted: Dec. 27, 1999. London (Dec. 27, 1999)?Rough diamond sales by the De Beers Central Selling Organisation reached a record $5.2 billion in 1999, a 57% increase from sales in 1998. Sales in the second half of 1999 reached $2.8 billion, 70% higher than the same period in 1998. "It's been a particularly extraordinary year as the market has changed so much from what it is today," said De Beers Managing Director Gary Ralfe. In the U.S. market, which represents 45% of De Beers' global sales, Christmas diamond buys represented 40% of that, Ralfe said. "Thanksgiving and Christmas have been a good season," Ralfe said. "Many stores reported double-digit increases over the last year." National Jeweler interviewed American jewelry retailers, who reported heavy diamond sales. "Diamond sales have been strong, especially carats to 2 carats, and better qualities, particularly in better makes," said Fred Weber, owner of Weber's Jewelers, Kettering, Ohio. Gregory J. Light, co-owner of Light's Jewelers in Plattsburgh, N.Y., said holiday diamond sales have been higher than last year's. "I don't know the exact figures, but I know they're up," Light said. "Everything from about a half-carat and bigger, rounds and SIås are the most common." Beyond strong sales in the United States, De Beers reported that the Asian-Pacific markets showed growth in 1999 over 1998. Polished exports increased to Japan. Southeast Asia showed some recovery, and European markets became revived in 1999. "Weåre looking for continued recovery in South Korea, Taiwan, China and the rest of them," Ralfe said. "For the rest of the year, we're looking for a total improvement in diamond sales of at least 10%. Retail demand is the underpinning strength of the market." Ralfe also mentioned the increasing strength of the Japanese yen as contributing to the growing Asian markets. De Beers also attributed the high sales to low levels of stocks in the cutting centers in the beginning of the year and improved sentiment throughout the industry above the level of retail demand. Ralfe also said the cutbacks in the ninth and 10th sights for 1999 were a move to exercise restraint, which will help De Beers' bottom line in the new year. "We're looking for a substantial and systematic approach to the marketing," Ralfe said. "We want to maximize our position to be a preferred supplier over the long run. The cutbacks in sites nine and 10 will allow us to do this for 2000." Send e-mail to John Gallagher. "