Diamond exports flat in Q2

MBONGENI MGUNI
Staff Writer | Thursday August 5, 2010 00:00

 

The figure represents a 4.6 percent decline in Pula terms from the revenue earned from exports over the second quarter of 2009. In US dollar terms, the decline is 0.83 percent, reflecting the Pula's weaker position over the greenback in the second quarter.

During the second quarter last year, the Pula averaged P7.18 against the greenback, while it has averaged P6.78 for the second quarter 2010.

According to June financial statistics from the Bank of Botswana released on Wednesday, diamond exports in the second quarter peaked in May at P1.73 billion, before slumping to P1 billion in June.  Analysis of export data since 2006 indicates a drop in diamond exports for the second quarter, due largely to the traditional reduction in production by miners and uptake by sightholders over the period.

The reduced exports for the second quarter are also likely a result of Debswana producing to demand, a policy stated by its management in a brief to sightholders at the beginning of the year.  Reduced demand could be linked to rising diamond stocks in the market, which began to filter in, in the first quarter, after most diamond mines cut back production last year.

Harry Winston Diamond Corporation, a Canadian diamond mining and retail company, also noted reduction in sales figures for the second quarter, in its results released last week.

The group's Chairman and CEO, Robert Gannicott said: 'During this quarter the diamond industry as a whole adjusted production to the curtailed demand in the intermediate part of the diamond pipeline due to the world economic conditions. Rough diamond prices increased substantially during the quarter with our own pricing ending at 50% above the low point in the first quarter.'

Similarly, Alrosa, the world's largest diamond producer, recorded a slight decline in production for the second quarter, in empathy to the level of demand. Alrosa produced 8.6 million carats in the first quarter, reducing this to 8 million in the second quarter, according to the conglomerate's half-year results.

Although De Beers did not disaggregate its production figures at its recently unveiled half-year results, Debswana produced 10.267 million carats during the first half of the year, tracking a target of 20 million for 2010.