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.
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Nice one prof. Here is the source for the original article
http://www.thejakartapost.com/news/2009/12/14/pearl-prices-drop-33-cultivators-stop-operating.html
Ouch! That pretty much sounds like the problems we are having at home!
Perhaps it is a time to stop production and wait for better times to arrive.
Thanks anonymous. It seems the link in my post is the same original.
Australian farmers wake up: The Indonesian Nusantara Pearl Empire is in the process of making chop suey out of you guys, no matter how long it takes and how much it costs. Asian patience and money versus Western arrogance and supremacy. Or, in other words: they bow deeply with a smile rather than flying a private jet to HK with a butterfly in their stomach. The game is heating up. Course, the Aussies produce the largest and most beautiful pearls. Kudos! But eventually, it narrows down to the question of who has more oxygen in the system to sustain the crisis. If the finest pearls don't come from Australia any longer, then so what? Then the world will have to accept the best from Indonesia. When beef runs out, people will eat lamb (I quite like lamb too!). Happened to the Burmese pearls in the late 60s and 70s. History repeating itself. While the slaughter among farmers goes on, it is a feast for at least some of the traders down the distribution channel (mainly Kobe based) targeting the markets that are still alive and kicking... Japan, China, Taiwan, Korea (guys, got it: it's Asia, for Xmas sake!). Production score board: Indonesia up 5, Australia down 2, Philippines down 3, Myanmar: game suspended, unable to pay the chalk to mark the field. Consumer score board: Asia up 8, US down 10, Europe up 2. Stay tuned.
Asians unfortunately do not have the sense of quality that Westerners have and appreciate. That can easily be seen from the junk that comes out of China. Cheap does not mean anything if it does not go along with quality. The last I heard the Indonesian economy is not exactly going to the moon. I'd say we wait and see how far Indonesian farms go if they have to depart from their products at depressed prices, especially with a double dip coming.
Anonymous, you are spot on about China and cheap junk of no real value. No space for this junk category on my scoreboard. I talk SSP producers. Fortunately, China is not a member of that Club. My point is that the Nusantara Empire has the not-so-healthy but rather unfriendly ambition of crushing all other producers... I only mentioned the Aussies... but as we observe now, it starts within their own territories... pushing the small chicks out of the nest... seems Nusantara is not aware of what happened to the Hunt Brothers and their silver....
Anonymous of December 17th, what do you mean "with a double dip coming"?
Paspaley will ride out the storm and as small to medium producers in both Australia and Indo fall away , Paspaley may be in a strong position to benefit from an improved market, along with any other survivors that can produce quality . Many Australian producers have operated way less than half their quotas this past season . It will be intersting to see the market conditions and supply in another two years.Two years too late perhaps for many.
33 ot of 36 indonesian producers. What about Atlas , concord , and analau pearl in Irian .
Where is the world going to get quality south sea pearls from in a few years.
If paspaley are so strong why have they become price takers when traditionally they where price makers?
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