Traders are reporting a continued strengthening of polished at wholesale level. The difficulty lies in passing the prices onto the retail market. Orders placed by retailers at the March BaselWorld fair were reportedly based on last year's polished prices. Some traders said they expected retailers to cut down on these orders at the current price levels. Meanwhile, US economic growth slowed in the first quarter of 2011 to 1.8%. This compares to an annual growth rate of 3.1% in the previous quarter, official figures showed. The main reason for the growth slowdown is the rise in petrol prices which is dampening consumer spending. The US Federal Reserve has cut its economic growth forecast for this year. “America’s (diamond jewellery) retail sector is still weak, buying is very cautious,” said a trader. The main focus is on the Chinese and Indian consumer markets. The main PolishedPrices index powered ahead rising to 149.14 points at Friday’s opening, compared to 147.68 points at the start of the week.

ROUGH MARKET
Traders reported a surge in rough prices at DTC’s Diamdel tender in Israel on April 14th. “The market is very hot,” one trader said. According to a trader in Antwerp, buying activity in the secondary market has slowed somewhat following the price surge. “For manufacturers these prices are just crazy,” he said. Many say that traders are not holding large stocks and are selling onwards immediately. “Where the rough is going we don t know, but demand remains very strong,” one trader said.

CORPORATE AND EVENTS
A public workers' strike in Botswana threatens to derail government efforts to rein in spending as it tackles a budget deficit while trying to shore up a nascent economic recovery, AFP reported. The Botswana Federation of Public Sector Unions launched a 10-day strike Monday to demand a 16 percent wage increase, against the government's offer of five percent, the report said. About 93,000 workers have joined the strike, according to the union, forcing schools, clinics and public offices to operate on skeleton staff, it said. The diamond-rich country was hit hard by the global financial crisis in 2008 as demand for its gems plunged and revenues from a regional customs union also dived. But after contracting by 4.9 percent in 2009, the economy grew 7.2 percent last year, making Botswana one of Africa's top performers and enhancing its reputation for sound economic management. Now the government is struggling to balance the demands of the newly strident unions, which argue that after a three-year pay freeze, public servants should benefit from the economic gains, the report said. "There is no commitment from government. We were mindful of the economic downturn, hence we delayed to demand a pay hike. Now the economy is on the rebound," said union leader Andrew Motsamai. "We play a part in generating the money that we use as a country," Motsamai added. President Ian Khama has flatly rejected workers' demands, insisting that hefty raises could reverse Botswana's economic recovery, said the AFP report. "I find it ironic that the government employees, equipped with better knowledge that our economy is running at a deficit, continue to demand a salary increment," Khama said last week. Botswana is running a seven billion pula ($1 billion, 746 million euro) public deficit, about 11.5 percent of Gross Domestic Product. Much of the debt was accumulated during the global recession, when government boosted spending to counter the effects of the downturn. Analysts say that meeting the unions wage demands will hobble plans to slash the budget deficit in the 2012 fiscal year. "As it stands, the economy is fragile," said Bogolo Kenewendo, an economist at eConsult Botswana. She said the government has been advised to cut wage bills by international economists, adding that it could only consider salary hikes after reviewing the country's second quarter performance.Diamond sales, which account for about half of government revenue, are rising again and the International Monetary Fund predicts the economy will grow by six percent in 2011, said the report. But Botswana is also struggling to digest sharply reduced revenues from the Southern Africa Customs Union, a regional scheme in which five nations pool their customs revenue in South Africa and then split it up. Revenue from the customs scheme is expected to drop by 2.1 billion pula this year, the report said. Under the customs sharing regime, regional powerhouse South Africa collects duties from the five members, pools them and then divides them under a formula that sees Pretoria essentially subsidising the budgets of its neighbours. Weaker customs returns have already hit poor neighbours like Swaziland, where the government is seeking to cut salaries for civil servants, sparking protests over the last month, the AFP report said.

Namdeb, a diamond mining venture between De Beers and the government of Namibia, said it expects to produce about 1.5 million carats of gems this year after returning to profit in the previous 12 months, Bloomberg reported. Diamond output is likely to rise from 1.472 million carats in 2010 in response to a recovery in demand as buyers restock and as consumers increase spending on luxury goods, Managing Director Inge Zaamwani-Kamwi told reporters in Windhoek, the report said. Earlier, Namdeb posted net income of 419 million Namibian dollars ($63.3 million) for the 12 months to Dec. 31, compared with a loss of 414 million Namibian dollars a year earlier. Sales of diamonds rose 12 percent to 1.522 million carats while revenue jumped almost 50 percent to 5 billion Namibian dollars as rough stone prices recovered, Zaamwani-Kamwi said, according to the Bloomberg report.