He is reported to have told the recent World Diamond Congress in Bangkok that the Japanese offtake was down by 39 per cent in the first five months of 1998 while some of the east Asian markets were virtually dead. Already CSO's sales for the first half of 1998 had fallen by 41 per cent to $1.70 billion compared with $2.88 billion in the same period of the earlier year.

The chances of any improvement in the prices for polished stones looked dim, until the Japanese and South east Asian markets recovered. Of course, the US demand was strong in view of the bullish stock market and there was some improvement in Europe as well but it was doubtful whether this could make up for the shortfall in other important markets. Under this situation, contractual quotas on diamond mining companies, which sold their output through the CSO's singlechannel system, were still in force and De Beers also was holding a substantial buffer stock.

On the other hand, new diamond mining groups were poised to enter this field. The BHP/Diamat group was expected to commission Canada's first rough diamond mine in October 1998. Its annual output may be around 3 to 4 million carats per annum with an average price of $130 per carat. The second diamond mine in Canada which was being developed by Rio Tinto/Aber Resources was likely to be commissioned by 2001. Its annual production will be more than four million carats, with an average price of $60 per carat. De Beers is also exploring for kimberlites in Canada.

De Beers' Venitia Mine in South Africa holds a lot of promise in future, while its Finsch mine is going underground. The life of Argyle Diamonds can be extended by four to six years through underground mining. Efforts are on to increase production in Russia as well.

The Diamond Promotion Services which is engaged in promoting diamond demand in the world,proposes to spend about $200 million for the purpose this year. So long as the mining companies mostly sold their output through he CSO's single channel system, they were all contributing to this programme.

It however, remains to be seen according to observers whether they will agree to any such suggestion unless they have an effective say in the implementation of such programme. It has been decided at the joint session of WFDB/IDMA that there should be full disclosure of lesser drilling of diamonds. Most members at the Congress argued that the De Beers proposal to brand polished diamonds may do harm to the industry and trade. It was however, explained on behalf of De Beers that the idea was still in an experimental stage in the UK to assess consumer reaction and that they would not rush into it if it was found to be not good for the industry.