The state-owned Okavango Diamond Company (ODC) in Botswana has temporarily stopped its rough stone sales, within a drive throughout the industry to reduce the surplus of inventory due to reduced global demand for jewellery.

This is according to the ODC managing director, Mmetla Masire.

After reporting a record $1.1 billion in revenue last year, ODC currently holds 10 auctions per year to sell its 25% allocation of production from Debswana Diamond Company, a joint venture between Anglo American's AAL.L De Beers and Botswana, as per the gem sales agreement between the partners.

Last year, Debswana produced around 24 million carats, which saw ODC receive an allocation of some 6 million carats, Reuters reports.

Next month's auction has now been cancelled, and a decision for the December auction is yet to be announced as the industry tackles a demand slowdown for cut and polished diamonds in the US and China, Masire stated.

"For the first time, we have had to build up inventory as we do not want to just irresponsibly release goods into a market which is already oversupplied. For now, we have stopped the auctions. We will decide on the December auction," said the ODC managing director during an interview.

In September, India's trade bodies, which cut and polish 90% of the world's rough diamonds, encouraged members to pause the import of rough diamonds for two months in an effort to manage supplies and boost prices due to the weaker demand.

Furthermore, De Beers said in August it would allow customers to defer certain purchases for the remainder of the year.

ODC's allocation is set to increase to 7 million carats within a deal between De Beers and Botswana. Masire added the company was focusing on establishing contract sales as well as other new sales channels.

"We are still to decide on what percentage of our allocation will be sold through contract sales to complement our auctions. We are likely to have two-year sales contracts, and we are looking at going into partnership with only a limited number of buyers so that we can better serve them," Masire said.