South Africa's diamond industry relies on local demand for jewelry to reverse fortunes
South African diamond polishers are enjoying increased demand as the pandemic-enforced proximity kindled romance and feel-good spending.
Nungu Diamonds, a Johannesburg-based cutting and polishing firm, saw its custom-made jewelry sales soar 60 percent since the lockdown in March.
According to Nungu Diamonds founder Kealeboga Pule, customers were lining up when stores reopened in June, their best month in a year, with sales including wedding and engagement rings.
Nungu has since hired an in-house jewelry designer to join a team of five polishers and nine jewelers.
Jewelry prices have held steady with profit margins expecting to improve as lower global demand pulled down the prices of uncut, unpolished diamonds.
Thoko's Diamonds, which was selling rough and polished stones, said it was turning to jewelry with hopes that its new line in earrings would appeal to the market.
According to Zipho Dlamini, co-owner of Thoko's Diamonds, their business would typically supply over 500 carats per year.
So far this year, the South African company had sold less than 20 carats with profits dropping 65 percent as their exports, which account for over half of its business, dried up.
Even before the COVID-19 pandemic, diamond prices and demand were weak, with De Beers' Anglo American unit reporting a plunge in earnings.