Diamond crunch raises new, scary questions

Tuesday, September 26, 2023 | 870 Views |

In a slump: Production remains stable at the country’s diamond mines, but demand for the precious stones is under severe pressure this year PIC: THALEFANG CHARLES

Facing the most difficult trading conditions in at least four years, new trends in the industry have raised questions about whether the downturn is part of the usual cycle or the start of a new scary normal for rough diamonds. MBONGENI MGUNI, TIMOTHY LEWANIKA & PAULINE DIKUELO report

Rough diamond sales, prices and revenues are down this year, in certain cases by double digit percentages, a fact being keenly monitored by the Finance Ministry which has said it stands ready to slash the growth forecast and up the expected budget deficit.

The crisis building for rough producers such as Botswana has largely been caused by high inventory levels of polished diamonds in the midstream, that section of the diamond pipeline occupied by cutters and polishers, who buy from mines and sell to jewellers.

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Diamond crunch raises new, scary questions

Facing the most difficult trading conditions in at least four years, new trends in the industry have raised questions about whether the downturn is part of the usual cycle or the start of a new scary normal for rough diamonds. MBONGENI MGUNI, TIMOTHY LEWANIKA & PAULINE DIKUELO report

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