Quarterly diamond revenue increases by N$2 billion but falls annually

Revenue from the sale of diamonds has increased by N$2 billion in the last three months.

This is a result of higher exports compared to the first quarter.

However, according to the Bank of Namibia (BoN) quarterly report, proceeds from rough diamonds declined on an annual basis.

“Diamond export earnings fell by 1.7% on an annual basis, to N$3.9 billion,” says BoN.

This is due to a decrease in the price of diamonds, resulting in an oversupply in the midstream.

“There has also been weak global demand from key downstream markets such as the United States (US) and China, further intensified by strong competition from lab-grown diamonds,” says the report.

In China, consumers are opting for gold jewellery, which is further pushing diamond prices down.

“Chinese demand for diamonds remains weak, as consumers increasingly shift towards gold jewellery as a means of preserving value,” notes the central bank.

According to the report, the growth in synthetic diamonds has led to a weak demand for natural diamonds.

“An important source driving the weak demand for natural diamonds is the continuous market share expansion of synthetic diamonds, which is expected to persist throughout 2024. Furthermore, the weak retail demand in the US also put downward pressure on diamond demand and prices,” says BoN.

Earlier this year, De Beers reported that its rough diamond sales had declined by 31% due to caution about purchasing diamonds.

“Many diamond businesses are continuing to take a cautious approach to purchases amid the uncertain economic landscape and the slow pace of growth in China,” said De Beers chief executive officer Al Cook.

De Beers has a 50:50 joint partnership with the Namibian government, forming the Namdeb Diamond Corporation.
The holding company has operations in Botswana, Canada, Namibia and South Africa.