As confidence continues to creep back onto the market, Botswana diamond exports tripled in September, further cutting down the country's trade deficit.

According to the latest figures from the Central Statistics Office, diamond exports shot from P655 million to P1.759 billion between August and September this year, contributing approximately 67 percent of Botswana's total export figures of P2.6 billion.In terms of diamond sales, August and September are traditionally the best months for Debswana, with normal diamond export levels hovering around P3 billion.Total exports for September 2009 recorded P2 608.8 million, 67.4 percent (P1 759.2 million) of which were diamonds, followed by copper-nickel at 16.7 percent (P435.4 million).

Textiles contributed 4.4 percent (P115.4 million) while Meat & Meat Products contributed 3.4 percent (P87.6 million) to total exports during the same month.The country has been running a trade deficit for the past 12 months due to a sharp decline in diamond sales.Thanks to soaring diamond sales, Botswana's trade deficit stood at P240.6 million in September, a considerable amount compared to late last year when the figure was nearly P1 billion.

In September 2009, total imports were valued at P2 849.5 million, an increase of 4.5 percent (P123.8 million) on the August 2009 value of P2 725.6 million. Comparison of total import value for September 2009 to the value recorded during the same month in 2008 shows a decrease of 8.9 percent (P278.2 million) from P3 127.7 million recorded during September 2008 to P 2, 849.5 million recorded during September 2009.Botswana registered a record P2.6 billion trade deficit in 2008 as diamond exports plunged by close to 90 percent in the four months between August and November 2008 as the global recession hit hard on demand for luxury goods.According to the CSO, diamond exports, which amounted to P3.3 billion in August, fell to P2.3 billion in November and to P821 million in October before plummeting to a mere P371 million in November as a result of falling demand and weakening prices. Global demand for rough diamonds is expected to drop by some 60 percent this year and the government has already estimated that revenues will be cut by over 50 percent.Factors militating against Botswana include the fact that the country is a net importer of goods, particularly fuel and food, is economically dependent on mineral exports, especially diamonds, and its growth prospects are largely built around investment in minerals.

However, looking on the bright side, analysts say long-term fundamentals of the diamond industry continue to hold considerable promise as the crisis seems to be fading away.

"The diamond industry is now in a stabilising phase where stocks, prices and supply and demand have to find a new equilibrium," renowned Israeli diamond industry expert and journalist, Chaim Even-Zohar, said in a recent article. "This may take 12 to 14 months. In that period, demand for rough diamonds will plunge by some 60 percent. This is inevitable. However, miners like DiamonEx - if they survive - are not losing revenues, they are merely delaying income to better times.

"Unfortunately, in this restructuring and stabilising process, 'pain' will not be shared equally. Botswana will be hurting more than many other players, but we believe that demand for rough diamonds will again grow in the second/third quarter of 2010. In an industry used to concepts like 'forever', this isn't too far ahead."