TAGS Withdraws Goods Amid Weak Prices

RAPAPORT... Customers left almost half of the diamonds on the table at the latest Trans Atlantic Gem Sales (TAGS) rough tender as the weak market dented demand, the Dubai-based company reported.TAGS presented rough worth $25 million at the smaller-than-usual tender, which took place in Dubai's Almas Tower from September 21 to 28, it said Wednesday. It featured the full range of sizes, mainly in better qualities.The sale took place amid a slowdown in the industry, with the global economic situation and overall uncertainty dampening sentiment, TAGS explained. The stagnant Chinese market and caution among consumers around the world have affected the diamond sector, and traders are seeing growth in rough and polished inventories as well as liquidity shortages and high interest rates, it added. "Unfortunately, approximately 45% of goods were withdrawn, reflecting the difficult market conditions and having fallen short of reserve prices," the company noted. "Sales were made to 40 companies, and our results were indicative of the prices achieved by the market, with [0.75-carat and larger] ranges being most affected."That category has taken the biggest hit because of the recent downturn, while smaller and cheaper goods have fared better, TAGS pointed out. Prices on the rough market had reportedly softened by 5% to 10% ahead of the tender, especially in those larger items, the company added."We were also informed that all goods from leading mining houses in these ranges were trading below cost," it said.Manufacturers hope the market will pick up after the October 24 Diwali holiday, when Indian factories will close for around three weeks, TAGS said.Image: Rough diamonds. (TAGS)