Economic Bulletin

RAPAPORT...The Conference Board Consumer Confidence Index rose slightly in December 2007, after a long, uninterrupted decline that began in the summer. As of the end of December, the index stood at 88.6, up from 87.8 in November. Lynn Franco, director of the Conference Board Consumer Research Center, said that the increase resulted solely from a rise in the Expectations Index. Consumers may now be in an economic climate that they consider far from ideal, as indicated by the continuing slide of the Present Situation Index, but their outlook regarding employment, inflation, business conditions and stock prices in the months to come has risen marginally.

Perceptions of present-day conditions remain glum. Consumers claiming that conditions are “good” fell from 22.5 percent to 20.3 percent, while those saying that conditions are “bad” rose from 18.9 percent to 20.0 percent. Those saying that jobs are “plentiful” fell from 23.3 percent to 22.7 percent, while those finding jobs to be “hard to get” rose from 21.4 percent to 23.5 percent.

But positive changes may come soon. Consumers who expect business conditions to improve in the next six months rose from 12.4 percent to 13.8 percent, while those anticipating that business conditions will worsen fell from 16.6 percent to 14.1 percent.

Belgian Polished Exports Up
Belgium’s exports of polished diamonds grew 26 percent to $1.05 billion in November 2007, according to figures released by the Antwerp World Diamond Center. By volume, polished exports rose 5 percent to 788,674.53 carats.

Belgium’s polished imports increased 26 percent to $873.32 million for the month, bringing its net polished exports – exports less imports – down 28 percent to $178.4 million. November rough imports to Belgium fell 14 percent to $781.9 million, while rough exports declined 17 percent to $846.96 million. Net rough imports – imports less exports – rose 40 percent, but held in deficit territory at $65.06 million.

Belgium’s November net diamond account – net polished exports minus net rough imports – fell 2 percent to $243.47 million. For the year to date, polished exports grew 13 percent to $9.85 billion, while imports rose 11 percent to $9.27 billion. Belgium’s net polished exports climbed 58 percent to $582.16 million.

For January through November, rough imports were up 10 percent to $9.37 billion, and rough exports rose 15 percent to $10.27 billion. Net rough imports, however, plunged 135 percent to negative $898.94 billion.

For the year so far, Belgium’s net diamond account grew 97 percent to $1.48 billion. The United States remained the major market for Belgium’s polished stones, as exports increased 7.5 percent to $2.94 billion in the first 11 months of 2007. Polished exports to Hong Kong rose 9 percent to $1.53 billion, and exports to Israel increased 13.5 percent to $1.22 billion.

India’s Polished Exports Grow
Polished exports from India grew 21 percent to $955.95 million in November 2007, according to data released by the Gem & Jewellery Export Promotion Council. Polished imports jumped 119 percent to $371.3 million during the month, causing net polished exports – exports minus imports – to drop 5 percent to $584.65 million. Rough imports fell 41 percent to $532.38 million, and rough exports declined 25 percent to $41.49 million. India’s net rough imports – rough imports less exports – fell 42 percent to $490.89 million.

The country’s November net diamond account moved into the black in 2007 to $93.76 million, compared with $232.35 million in the red one year ago. For the first 11 months of 2007, polished exports grew 20 percent to $12.12 billion, while imports rose 119 percent to $3.43 billion. Net polished exports, therefore, rose 2 percent to $8.69 billion. India’s rough imports have grown 12 percent to $8.41 billion for the year to date, and exports are up 8 percent to $459.87 million. Net rough imports rose 12 percent to $7.95 billion.

For January through November, India’s net diamond account fell 49 percent to $739.27 million. In other gem and jewelry news, India’s exports of gold jewelry grew 1.6 percent to $581.46 million in November, while nongold jewelry fell 26 percent to $15.9 million. Colored gemstone exports rose 11 percent to $21.55 million.

Israel’s Polished Exports Rise
Israel’s polished diamond exports rose 9 percent to $805.1 million in November 2007, the country’s Ministry of Industry, Trade and Labor reported. Polished imports grew 21 percent to $442.2 million, causing Israel’s net polished exports – exports minus imports – to drop 2 percent to $362.8 million for the month.

November rough diamond imports to Israel fell 13 percent to $392.6 million, while exports declined 3 percent to $259.3 million. Net rough imports – the difference between imports and exports – therefore slumped 28 percent to $133.3 million.

Israel’s November net diamond account decreased 24 percent to $229.5 million. For the year-to-date, Israel’s polished exports grew 7 percent to $6.74 billion, while polished imports were up 13 percent to $3.96 billion. Net polished exports were flat at $2.78 billion.

In the first 11 months of 2007, rough imports increased 7 percent to $4.49 billion, and rough exports rose 24 percent to $3.12 billion, resulting in a 17 percent decline in Israel’s net rough imports to $1.37 billion. Israel’s net diamond account, however, maintained a healthy balance, growing 26 percent to $1.41 billion for the year so far.

The United States remains the largest market for Israel’s polished diamonds, although exports fell 5 percent to $3.6 billion from January through November.

Namibia Marine Diamond Sale Nets $388K in October
Diamond Fields International Ltd. (DFI), the Canadian mining company partnered with Bonaparte Diamond Mines on marine mining off Namibia’s coast, announced their October sales results. An estimated 1,889 carats sold for $388,303, or an average price of about $206 per carat. Total production sales stand at $3.8 million for 17,455 carats.

Diamond production continued to improve in October 2007, with recovery of 4,864 diamonds weighing 1,894 carats. Total production as of October 31, 2007, was 42,827 diamonds weighing 18,139 carats with an average size of 0.42 carats per stone. Roger Daniel, Diamond Fields’ president and chief executive officer (CEO), reported that the partners have identified seven new diamond deposits, which will support joint mining operations through 2008 and 2009.

Daniel stated that the partners expect the newly defined areas to be incorporated into the joint venture production plans early in 2008, in order to boost current production. The recent sampling program, Daniel noted, covered about 24 percent of the expanded area of 10.8 km(2), and the partners expect additional development work to further expand the mining resource base.

African Diamonds Narrows Losses in Fiscal 2007
African Diamonds PLC narrowed its losses in its fiscal year 2007 as it headed toward production at its AK6 flagship project in Botswana in 2009.
The company reported a net loss of $751,918 (GBP 364,325) for the year ended June 30, 2007, compared with a loss of $795,904 (GBP 385,637) in the previous fiscal year. The company’s only income came from interest receivables, up 141 percent to $267,749 (GBP 129,732) for the period.
African Diamonds’ fiscal year-end review stated that the AK6 project was on track to begin mining diamonds by the end of 2009 and to ramp up to a full production capacity of 1 million carats per year by 2012. In the first 12 years, AK6 will operate as an open pit mine, which the miners will then consider moving underground. A final decision is expected early in 2008.

Article from the Rapaport Magazine - January 2008. To subscribe click here.