Botswana feels brunt of diamond market slump

After a robust first seven months of 2011 in which demand and prices recorded phenomenal upswings, the diamond market softened in the later part of the year, a trend which has continued into 2012.Rough and polished market players say  diamond-trading trends have deteriorated due to Eurozone economy concerns, tight liquidity and reduced demand in India and China. India, which is the world largest diamond cutting and polishing centre, is feeling the heat of a new import tax on polished diamonds implemented in January 2012 and the currency depreciation that has riled that country's domestic financial markets in recent months.

In a recent interview with Business Week, DTC CEO Varda Shine said high stock levels, liquidity constraints, a weaker Rupee in India and softer demand from China have contributed to lower global demand this year. Shine said after firming by a significant 25 percent last year, diamond consumer demand is slower this year and will probably end the year at around 10 percent.