Botswana’s diamond sales face slump as Coronavirus locks out key buyers

Botswana’s pillar diamond industry is expected to take a significant hit from the coronavirus pandemic.  Botswana on Monday banned travellers from 18 high-risk COVID-19 countries, including Belgium, China and India, where many of the world’s diamond dealers are located. 

The buyers usually travel to Botswana several times a year for sales arranged by De Beers, the world’s leading diamond corporation. But the travel ban means buyers will not be able to attend the diamond sale, or “sight,” set for March 30, Bloomberg News reported.    

Speaking via a messaging application, Gaborone diamond trader Maclean Letshwiti says the industry is set to suffer. 

“Most of the sight holders come from areas that have a high risk of the virus, which actually means they cannot travel to Botswana to come and buy diamonds,” Letshwiti said. “For the local diamond industry, if this thing persists, it is going to affect the manufacturing sector.  There is a likelihood that most factories will be operating at half capacity if the virus persist(s).” 

De Beers said if the travel ban remains in place, a contingency plan will be developed, which could include having buyers use local brokers or buying diamonds sight unseen.  The diamond industry was already facing poor sales in the Chinese market amid the coronavirus outbreak. De Beers Group Chief Executive Officer, Bruce Cleaver said in a statement that sales were projected to drop by nearly 40% from January to February. 

Gaborone-based economist, Keith Jefferis said the virus is hurting demand.    

“Because of the COVID-19 outbreak, people are not shopping as much as they would have,” he said. “I think we will see that the demand for diamond jewellery will be weaker over the next few months. People are not shopping as much, some weddings will be postponed, and that will ultimately affect the demand for rough diamonds.” 

Botswana is the biggest diamond producer in Africa and the second biggest in the world after Russia, making up more than 80% of the country’s foreign earnings. 

Source: https://www.voanews.com/science-health/coronavirus-outbreak/botswanas-diamond-sales-face-slump-coronavirus-locks-out-key

Some information in this report came from Bloomberg.

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