UPDATE 1-Petra Diamonds FY output jumps, trade challenging

* Annual output surges more than 450 pct to 1.1 mln carats

* Revenue dips to $69.1 mln on lower rough diamond prices

* Trading conditions remain challenging

* Rand strength absorbing much of increase in rough prices

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LONDON, July 7 (Reuters) - Petra Diamonds Ltd (PDL.L) said on Tuesday its annual output jumped above 1 million carats, but the African diamond producer added that revenue dipped and trading conditions remained challenging.

Annual production surged to 1.1 million carats in the year to end June, up more than 450 percent from the year earlier, but revenue fell to $69.1 million from $76.9 million on lower rough diamond prices.

"Trading conditions remain challenging and our cash flow remains tight, with the recent strengthening of the rand absorbing much of the benefit of the increase in rough prices," said Chief Executive Johan Dippenaar.

(Reporting by Julie Crust; Editing by Matt Scuffham)