Trade Surplus Drops 50% On Weak Diamond Prices

Mbongeni Mguni | Monday March 5, 2018 17:49

 

The trade balance is the relationship between imports and exports of goods at national level. A trade surplus occurs when the value of exports is greater than imports in any calendar year.

Statistics Botswana figures show that last year, exports amounted to P61.1 billion, while imports were pegged at P54 billion.

By comparison in 2016, exports were estimated at P80.3 billion against imports of P66.7 billion.

Last year’s trade balance is the second surplus since 2015, when the country recorded a deficit of P9.7 billion.

Botswana has experienced seven deficit years in the last decade, with 2012 the worst at P16.3 billion, due largely to either lower mineral production or lower prices for the minerals.

Stats Botswana data for 2017 indicates that the value of exports was dragged down by lower diamond exports, which fell 23% to P54.4 billion.

While local diamond production rose to a three-year high in 2017, De Beers has said revenues were impacted by an average 13% drop in rough diamond prices.

Globally, De Beers produced 33.5 million carats in 2017, up from 32.5 million, but still saw a four percent drop in revenue to US$5.8 billion (P56 billion).

“The average price realised reflected stronger demand for lower value goods…as well as the ramp-up of production from lower value per carat but high margin operations including Orapa and Gahcho Kue in Canada,” the diamond giant said in 2017 financial review released last week.

Another major blow on exports in 2017 came from the collapse in copper and nickel exports, which dropped from P2.6 billion to P41 million. The fall was due to the closure of BCL and Tati Mines in October 2016.