Business

Trade deficit reaches P2.4bn

Mbongeni Mguni | Wednesday July 3, 2024 12:31

Under pressure: The weakness in diamonds has exclusively been at the retail end, affecting the mid-stream where cutters and polishers are, and the upstream, where producers such as Botswana operate PIC MORERI SEJAKGOMO
 
Under pressure: The weakness in diamonds has exclusively been at the retail end, affecting the mid-stream where cutters and polishers are, and the upstream, where producers such as Botswana operate PIC MORERI SEJAKGOMO

The April deficit is the eighth successive month of shortfalls in the country’s merchandise trade balance, the measure of exports and imports of goods. Statistics Botswana revised the March deficit to P363.7 million from an initial estimate of P2.5 billion, providing hope that the final figures for April may yet be improved.

However, figures released by De Beers last Wednesday indicate that rough diamond sales in the fifth auction of the year were down 18% from the fourth cycle at $315 million. Diamond producers such as De Beers are hoping to rebound this year after a difficult 2023 caused by global economic weaknesses, a softer-than-forecast rebound in China, and industry reputational concerns amongst consumers due to the Russia-Ukraine conflict.

The strong demand of 2021 and 2022 met these factors and resulted in a glut or oversupply in the market at the retail level in 2023. Commenting on the latest results,

De Beers CEO, Al Cook, said the northern hemisphere’s summer is generally a quieter period for rough diamond sales. He said the recent JCK Show in Las Vegas had confirmed retailers’ interest in natural diamonds, but ongoing economic challenges in China meant the recovery in diamond demand was expected to be U-shaped.