Botswana Diamond exports slump in January on low demands

Downward trend:Warnings of a market slump in 2012Botswana’s diamonds exports dropped about 66 percent in January 2012 to 805.9 million pula (109 million U.S. dollars) compared to the same month last year, latest preliminary figures from Bank of Botswana (BoB) shows.BoB’s figures indicate diamonds exports in January slumped to the levels last seen in 2009 when the country’s diamonds exports experienced most severe hit by the global recession. In January 2009, diamond exports were recorded at 438.7 million pula, compared to 1.63 billion pula and 2.35 billion in January 2010 and January 2011 respectively. The figures also indicate a downward trend as diamonds exports in January 2012 followed the 1.35 billion pula exports in November 2011 and 1.18 billion pula exports of December 2011. While before November and December, diamonds exports averaged 8.54 billion pula in the first three quarters of 2011.According to local daily Mmegi, January’s slump is “warnings of a market slump in 2012 come to reality.” Diamond producers and other industry experts have warned of a flattening of prices at best and a slump as the precious stones suffer from the slowdown in the Euro zone and United State economies this year at worst. “Although their dominance has declined in recent years, both the U.S. and Europe remain critical markets for rough and polished as well as diamond jewellery, making them the leading determinants of prices for the precious stones,” the daily said.Local analysts say lower international demand is expected to continue applying pressure on diamond exports, with smaller mines in the BK11 category likely to be harder hit than the larger De Beers’ operations. Botswana government will be hoping diamond exports improve going forward as it recalls that February 2009 exports slumped even further by 37 percent from their January levels, triggering the closure of several operations of Debswana, a 50/50 joint venture of Botswana government and diamond giant De Beers.