The global economic crisis has left few untouched. Producers around the globe have covered their grafting tables, pulled their shell and switched off the lights. As wholesale demand decreased, the unstoppable pipeline glut grew, pushing pearl prices to unsustainable levels. Whilst many believe the worst is now behind, producers struggling to hold their footing will be among the last to see the recovery.
In West Nusa Tenggara, Indonesia, 33 of 36 cultivators have stopped or nearly stopped producing. Production has dropped to 200 kilograms from an annual average of 1.2 tons. This has followed a drop in price from Rp 135,000 to Rp 1.5 million per gram, to a paltry Rp 35,000 to Rp 300,000 per gram. These prices fall far short of sustainability as prices are well below production cost.
The future promises to be difficult for the remaining producers, and those that close may or may not ever return. Without market correction, they won’t have a reason.