According to data from the Bank of Botswana Economic Financial Statistics, the value of diamonds sold by Debswana fell from P9.8 billion in Q2 of 2024 to P3.3 billion in Q3, a 66% quarter-on-quarter drop. Rough diamond sales refer to the value of Debswana mined diamonds sold to both De Beers and Okavango Diamond Company.
In Q3 of 2023, rough diamond sales were capped at P8.7 billion, only to contract by P5.3 billion to the current year's P3.3 billion. The diamond market has been subdued by China's weak economic performance coupled with high interest in America that curtailed spending in the past quarters. The ripple effect of this continued downturn in diamond sales has seen the downfall of exports, tipping Botswana into a negative trade balance. Statistics Botswana noted that in July, the country’s trade balance – or the difference between the values of exported and imported goods, widened to a shortfall of P4.2 billion from a deficit of about P3 billion in June.
The country’s trade balance has been in negative territory since September last year when diamonds entered a slowdown broadly caused by oversupply in the retail end of the market. According to Statistics Botswana figures, the declining export figures in July were caused by diamonds, whose exports dropped 68% in the month to P1.1 billion. The most recent time that diamond exports were lower than the July figure was in April 2020, but the zero exports recorded for that month were possibly due to the travel bans instituted for the COVID-19 pandemic. To enforce a rebound, De Beers and the natural diamond industry have mounted a festive season marketing campaign that will be crucial to a long-awaited recovery in the sector, following a slump extending back to the third quarter of last year.
For De Beers and producers such as Botswana, the period between Thanksgiving in the United States (November) and the Chinese New Year (January) is traditionally the prime retail period for natural diamond jewellery, accounting for more sales in the year. This year, the stakes for the key period are much higher, as De Beers and others need the festive season sales to clear the oversupply in natural diamond jewellery that has been plaguing the market. This would help recovery further up the pipeline, to the midstream of cutting and polishing firms, as well as the upstream of producers such as Debswana.
