The second quarter has witnessed proceeds from Namibia’s diamonds exports increase significantly by N$2.0 billion, reflecting a significant increase in the volume exported relative to a typically slower first quarter
Despite this however, the Bank of Namibia notes that on a yearly basis, proceeds from rough diamonds declined marginally
“Diamond export earnings fell by 1.7 percent on an annual basis, to N$ 3.9 billion, partially attributed to a decline in realised prices, resulting from an oversupply of diamonds in the midstream and weak global demand from key downstream markets such as the US and China, further intensified by strong competition from lab-grown diamonds,” Bank of Namibia said.
On the other hand, the export revenue realised from other minerals increased on an annual basis, primarily ascribed to higher export receipts from gold. Export earnings from other minerals increased by 31.6 percent on an annual basis to N$4.1 billion, due to higher export earnings from gold, which rose by 33.7 percent supported by higher prices. The rise in gold prices was aided by increased demand due expectations of interest rate cuts, and higher purchases from central banks given its role as a store of value and safe-haven asset, and a decline in the US treasury bill yields. Meanwhile, on a quarterly basis, export revenue from other minerals declined by 4.7 percent, mainly supported by lower lead export volumes.
Export earnings from uranium in particular, fell both on an annual and quarterly basis during the second quarter of 2024 on the back of lower volumes exported. Uranium export earnings declined by 41.6 percent and 45.0 percent year-on-year and quarter-on-quarter to N$1.8 billion, in line with weaker uranium export volumes due to the unavailability of shipping vessels coupled with a shortage of shipping containers that are suitable for transporting uranium.
“In the spot market, the average international price of uranium rose by 61.2 percent, on an annual basis to an average of US$87.88 per pound during the second quarter of 2024. The continued upward pressure on uranium prices reflects the persistent global uranium supply defi cit combined with a higher demand for cleaner energy,” Bank of Namibia said.
Non-mineral exports
Export earnings from manufactured products fell year-on-year largely ascribed to lower receipts from polished diamonds and processed fish, while increasing on a quarterly basis. Export earnings from manufactured products fell by 10.3 percent on a yearly basis to N$6.7 billion, primarily due to lower export earnings from processed fish and diamond polishing.
“The former reflects the appreciation of the Namibia Dollar relative to major currencies while the latter is attributed to lower volumes exported due to weaker demand for diamonds. Meanwhile, on a quarterly basis, export earnings from manufactured products rose by N$625 million to N$6.7 billion, supported by higher receipts from beverages and beef ascribed to higher volumes exported.”
Export earnings from food and live animals declined both on a yearly and quarterly basis driven by lower receipts from unprocessed fi sh. The total value of food and live animal exports decreased by 2.0 percent and 11.3 percent on a yearly and quarterly basis, respectively, to N$882 million. The decline was mainly driven by lower export earnings from unprocessed fish, due to the strengthening of the exchange rate during the period under review. Meanwhile, the annual decrease was attributable to a reduction in the exports of grapes, due to seasonal factors.
Average weaner and sheep prices declined both on an annual and quarter-on-quarter basis. The average prices of weaners fell by 4.0 percent and 3.1 percent on a yearly and quarterly basis, respectively, to N$23.97 per kilogram. Similarly, the average price of sheep fell by 11.2 percent and 8.7 percent on a yearly and quarterly basis, respectively, to N$47.26 per kilogram. The declines in the weaner and live sheep prices are ascribed to oversupply of livestock, caused by drought induced marketing.
Namibia’s key export destinations remained South Africa, Botswana, the Eurozone and China during the second quarter of 2024. South Africa accounted for about 25.8 percent of Namibia’s merchandise exports, mainly made up of gold, live animals, fish, beverages and wood charcoal. Despite a decrease in its share to roughly 18.5 percent, Botswana continued to be Namibia’s second-largest export destination.
“This primarily consisted of diamonds, further augmented by re-export of mineral fuels. Meanwhile, exports to the Eurozone increased to 18.5 percent, mainly consisting of fish, polished diamonds, copper concentrate and beef. Although China retained its position as the fourth-largest export destination, its share fell to around 8.3 percent, as export volumes of uranium, lead and processed diamonds declined during the period under review. Similarly, the United Arab Emirates’ share declined to 4.5 percent, reflecting lower export volumes of processed diamonds. Other notable export destinations included Zambia with 4.0 percent, the United States at 3.7 percent and the Democratic Republic of Congo (DRC) at 3.0 percent,” the Bank of Namibia said.