Diamond exports reach P20bn mark

Diamond exports from Botswana have surpassed P20 billion ($3 billion) in the first seven months of the year on the back of both higher demand and firmer prices, figures released by the Bank of Botswana (BoB) show.

Exports from Botswana which comprise both rough and polished diamonds, were at P20.8 billion in 2008 before falling to P15.2 billion in the recession year of 2009 and rebounding to P21.7 billion last year.

According to figures released by the Central Bank this week, Botswana exported diamonds worth P3.88 billion in July after selling P16.55 billion worth of the stones in the first half of the year bringing the total to P20.43 billion with five more months left before the year ends.

The P3.88 billion- ($594.3 million) worth of polished and rough exported diamonds in July, were a percentage increase of 371.3 from the same month last year. However month-over-month exports have declined by 11.4 percent. In June though, exports were unusually high, reaching a record $670.8 million in diamond exports.

Although the P20.43 billion exports recorded up to July include a marginal contribution from Firestone Diamonds' BK 11 Mine, the majority of exports are production from Debswana's three operational mines. Debswana produced 11.32 million carats in the first half of the year, up from 10.3 million in 2010 but revenues have been significantly higher due to firmer prices during the first half of the year. According to the De Beers interim results for the first six months of the year, a 33-percent rise in sales saw prices increase by 35 percent to reach unmatched levels on the back of robust demand in the US, China and India.

"This is the highest-ever sales figure recorded for the first half of the year, buoyed by continued retail demand from the Indian and Chinese consumer markets and stronger than expected demand in America., said De Beers about the results. However, the last five months of the year will less likely fetch revenues as high as the first half of the year as the diamond market is now cooling off with prices starting to soften.

Industry players say since the start of the third quarter, the prices of diamonds have softened - especially for certain type of diamonds - after more than a year of sharp increase,
The September DTC sale was slightly lower as buyers are looking for discounts due to the cooling off in the market.

Though rough diamond prices had risen approximately 40 percent in the first half of the year, they had dropped off by between 15 and 20 percent since the beginning of August due to uncertainty in international markets.

Most producers and retailers attribute the price jump in the first half of the year to a shortage of stones on the market, as well as high demand in China and India. Firestone officials said, during a eent meeting in Gaborone, that the company expects prices to stabilise towards the end of the year, while continuing shortage of the precious stones will limit any price drops in the interim.