PLAYING TAPS FOR U.S. PEARLING

The Prof recently wrote eloquently about the upcoming Hong Kong event, and hopes for a resurgence of the dormant pearl industry. Maybe so, but not many others subscribe to this possibility as the bell cow of pearl buyers around the world (America) is pretty much dead on its feet.

Here’s what a major player in Asia, a widely respected pearl dealer, had to report to me recently on this matter:

We are estimating that the U.S. pearl market, on the wholesale level, is dead as a duck. None of the big hitters seem to have any appetite whatsoever... and this for many months, and likely many more months to come, so it seems. This is a huge market that is lifeless in the water, and, of course, it is us, the middle-men, who are suffering.

But imagine the farmers: the pressure on them grows by the week. Do you realize that the largest market just a few years back has practically closed its doors to purchasing? It’s a terrible situation. Many of us can only hang in because we are very small, innovative, and established also in Europe, Japan and Asia. We cannot count on the U.S. market any longer.

Here in Asia, quite a few medium and larger sized companies are in deep trouble too, mainly because they have loans with the banks and they MUST show a profit to these banks to maintain their loans and credit with the result that many are no longer honest and therefore are fiddling their figures to appear they are staying in the black. Unless the situation improves soon, this is a terribly deadly, self-perpetuating scenario.

This pearl picture looked bleak a few months ago... but the way many of my colleagues and I see it, it has NOT improved, and is not improving. To the contrary, it is becoming worse... and worse... and worse. I fervently hope that there are some of us to put the last lights out, should it come to this.

Sorry to be the conduit of bleak news. But this is a clear vision of what folks outside the country are thinking these days.

Perlemeister

I Guess This is my Anniversary

I sat down to type something up this morning when I realised today is a special day. This is post number 100! When I started writing, I thought it would be possible to post something every day. I guess I’m not big on commitment. The blog is now a full year old. But hell, 100 ain’t bad!

So what’s new to report? The pearl world is starting to get a bit antsy. The September Hong Kong Fair, the world’s largest jewellery trade fair, is right around the corner. Will we hear about the doom and gloom, or could this be a turning point in the industry? I guess we’ll find out in less than a month. Then again, some of the big boys are finding out right now.

Both Paspaley’s APC and Robert Wan are working round the clock, under the table, pushing the South Sea and Tahitian pearl auction pre-sales. What has happened to the market when pearl farmers are chasing buyers, doing what they can to quickly return the system to the way it once was? That or at least to begin operating in a more traditional fashion?

Once upon a time, auctions were restricted to the biggest and best buyers. But some producers got a wee bit greedy and started to let just about anyone in. This, of course, drove prices up and upset the traditional distribution channels. The large processors were suddenly competing with their own customers—ouch! Talk about a kick in the arse.

So how do the growers make amends? How do they get those big buyers back, fat and happy? Hold pre-sales, of course! Invite the big buyers to Hong Kong a month before the real auction, let them bid on the lots they want, and let the rest of the buyers battle each other over the scraps in September. They’re splitting the buyers. That certainly is a lot easier than telling smaller customers their business at the auctions is no longer welcome.

It’s a win-win situation—at least for the growers and the big buyers. The buyers are no longer competing against their customers, and they’ll have goods prepared for the Hong Kong show, where they might be able to turn them over and go back to the growers for more.

YOU THINK YOU GOT TROUBLES?

We are awash in bad news from every direction in the pearl world these days: companies closing, folks being put out of work, cash registers not ringing, everyone crying the blues. So I was looking for someone with more problems, someone to whom I could say “Thank God it was you, and not I.”

So I found one. His moniker is Triple Nickel, and he flies the 747 that hauls the Space Shuttle to and fro. Listen to his story for a moment, if only to feel a wee bit better (and maybe even to grin once in a long time):

Walt and all,

Well, it's been 48 hours since I landed the 747 with the shuttle Atlantis on top and I am still buzzing from the experience. The experience was surreal. Seeing that "thing" on top of an already overly huge aircraft boggles my mind. The whole mission from takeoff to engine shutdown was unlike anything I had ever done. It was like a dream...someone else's dream.

We took off from Columbus AFB on their 12,000 foot runway, of which I used 11,999-1/2 feet to get the wheels off the ground. We were at 3,500 feet left to go of the runway, throttles full power, nose wheels still hugging the ground, copilot calling out decision speeds, the weight of Atlantis now screaming through my fingers clinched tightly on the controls, tires heating up to their near maximum temperature from the speed and the weight, and not yet at rotation speed, the speed at which I would be pulling on the controls to get the nose to rise. I just could not wait, and I mean I COULD NOT WAIT, and started pulling early. If I had waited until rotation speed, we would not have rotated enough to get airborne by the end of the runway. So I pulled on the controls early and started our rotation to the takeoff attitude. The wheels finally lifted off as we passed over the stripe marking the end of the runway and my next hurdle (physically) was a line of trees 1,000 feet off the departure end of Runway 16. All I knew was we were flying and so I directed the gear to be retracted and the flaps to be moved from Flaps 20 to Flaps 10 as I pulled even harder on the controls. I must say, those trees were beginning to look a lot like those brushes in the drive through car washes so I pulled even harder yet! I think I saw a bird just fold its wings and fall out of a tree as if to say "Oh just take me". Okay, we cleared the trees, duh, but it was way too close for my laundry.

As we started to actually climb, at only 100 feet per minute, I smelled something that reminded me of touring the Heineken Brewery in Europe ...I said "is that a skunk I smell?" and the veterans of shuttle carrying looked at me and smiled and said "Tires"! I said "TIRES??? OURS???" They smiled and shook their heads as if to call their Captain an amateur...okay, at that point I was. The tires were so hot you could smell them in the cockpit. My mind could not get over, from this point on, that this was something I had never experienced. Where's your mom when you REALLY need her? I am sure I will wake up in the middle of the night here soon, screaming and standing straight up dripping wet with sweat from the realization of what had happened.

So if any of us in the pearl biz is feeling the blues, consider that there are many others out there, not in our little piece of the world, who are (as the French say: “debrouillez vous”), muddling through. And who are, also, checking their laundry from time to time in these bowel-clenching times. Maybe even muddling upon occasion.

Bafoon

The Andamans Calling All Pearl Grafters

Nick Paspaley once stated that growing pearls is easy. However, growing quality pearls is difficult. Well for some, just growing pearls is turning into a daunting challenge.

Dr Sunil Mohamed, head of the Molluscan Fisheries Division of the Central Marine Fisheries Institute in Kerala, India, is reaching out to seek help with growing whole, round pearls. In a letter sent to a states-side friend and posted on to me, Dr Mohamed is requesting the help of a professional Pinctada margaritifera seeder from French Polynesia. I have posted it below, with permission.

Any grafters out there interested in a nice vacation to the Andaman and Nicobar Islands?

Dear Sir-

We have been running a project in Andaman and Nicobar Islands for black pearl production for the past 4 years without making much headway, mainly because of logistic problems. We have been able to establish a small hatchery, 2 pearl farms, devise natural spat collection methods, devise a technique for mabe pearls in Pm and Pteria. But so far we have been unsuccessful in getting round cultured black pearl.

That’s why I thought u would be able to help us. If u could get us in touch with pearl seeders for Pm, we are keen to use their expertise (and also to learn) in producing black pearls. Of course we will pay for their airfare and also seeding charges (if it is within our budget). So please let me know where these chaps are available and also the approx cost of hiring them.

Dr. K. Sunil Mohamed

Head, Molluscan Fisheries Division

Central Marine Fisheries Research Institute [CMFRI]

Email: ksmohamed@vsnl.com; mfdcmfri@vsnl.com

A Paris Plug for Pearls

Oh, that’s hot!

Paris Hilton spent a week in French Polynesia and left with a $130,000 strand of pearls from Robert Wan. Why is this significant? Ms Hilton may have just done for the Tahitian pearl industry what GIEPDT spent millions of pearl farmers’ francs trying to do for years. Leave it to a dumb blonde to help save a flailing industry.

It seems the Tahitians are now proactively addressing the maladies of the industry. First, the recent reinstating of the 200 FCP per gram tax on all exports and the retro-tax of 50 pence being levied on the freeloaders of 2008/2009, and second, new plans to set up a sort of Pearl Centre, which aims to act as a sort of centralised buying and selling organisation. In other words, centralised control.

Production is set to halve in the next two years, which is expected to eventually drain the pipeline that has backed up, further destabilising prices. The government is also planning to regulate the import of nuclei in an effort to control rampant over production. Once things are back under control, pearls will be funneled through the Pearl Centre where pricing will be determined and controlled.

Many of the new initiatives are with Mr Wan at the helm. The most prolific and well-known producer of Tahiti is widely considered to be leveraged past his eyeballs, struggling to keep his own empire afloat, attempting to sell at least one farm while prices have hit an all-time low.

Centralised control is a lofty goal, but truly the only chance the industry has. But this will mean, Mr Wan, if this is going to work, it will only work if all producers are aligned with the same goal. That also means no more flying shit-grade pearls off the atolls and over to the Cooks, driving circle prices below the cost of export.

One more thing I just have to point out. Finding a picture of Paris and Mr Wan was not difficult. It seems that blond bimbo hits every rag site the second she steps out the front door. But if you scroll to the second picture of Paris with Wan the caption is certain to draw a laugh.

“Paris with dude who sold her the pearls.”
Oh, that’s hot!

IMPROVEMENT IN JAPANESE AKOYA PEARLS

National Jeweler online reported recently that Mikimoto (you surely know this name) has found that one of its pearl farms– this one located in the open seas off Fukuoka Prefecture, as opposed to the closed, calmer bay waters traditionally used for akoya cultivation– has yielded a small crop of unusually excellent akoya pearls of a large size and fine quality.

“The results have been astounding at this new akoya pearl farm,” the company reports, due primarily to better water temperatures, larger and stronger native oysters, ideal ocean currents and better nutrient-rich phytoplankton feed to produce an improved host oyster with a significantly lower mortality rate that results in a higher percentage of high lustre and good colour pearls for which both the species and the company are typically known for.

“Cultivating pearls using native oysters in this area heralds an important new advance in Japanese pearl production, at a time when the amount of high-quality akoya pearls is feared to be decreasing,” the company said. This past winter at Ainoshima, pearls were harvested from 10,000 akoya pearl oysters that had been raised to maturity over the past four years. Nearly 12,000 pearls were harvested. The goal for 2010 is to harvest pearls from 50,000 akoya oysters, with the number of oysters to be harvested expected to grow to 200,000 within the next three years, the company said.

Is this the dawn of a new akoya cultivation business, using home-grown, disease-free, natural pearl oysters to revive a moribund Japanese pearl industry? We can only hope so.

PERLEMEISTER

source: National Jeweler online

In Pursuit of the Perfect Pearl

I’ve mentioned Joseph Taylor and the Atlas South Sea Pearl Ltd. a few times over the past year. Joseph is an intriguing chap, one who takes pearl science to unprecedented levels. If you have the opportunity, read his Pinctada maxima doctoral thesis. It contains nearly as much pearl science as The Pearl Oyster, the new Southgate and Lucas book, to which Taylor and Elisabeth Strack contributed a chapter.

Atlas is based in Indonesia, but unlike most Indonesian producers they focus on pearls from silver-lip P. max. That’s unusual because the native shell population is overwhelmingly gold-lip. In fact, gold-lip is more prevalent everywhere, although silver-lip proportion rises south of the equator. After seven years of selective breeding, Atlas now grows more than 90 percent silver and white pearls. That, mates, is the work of a PhD marine biologist.

Atlas has teamed up with scientists at James Cook University to grow what they call the "perfect pearl." JCU researchers have sequenced the pearl oyster genome. Their next task is to determine which genes are responsible for producing the finest pearls with the finest colours.

“We’ve essentially got a list of all the genes the oyster uses to produce a pearl,” said Dr Dean Jerry of JCU’s Department of Agriculture. “Now we just need to identify which of those genes make the nicest pearls. Basically, we’ll be testing each gene in thousands of oysters to identify just five or six genes that make the pearl round, shiny and a pure gold colour,” said Jerry.

It will likely be some time before anybody knows whether a recipe for the perfect pearl exists.

This also raises new questions:

Is it certain that pearl quality is solely genetically determined?

If the genes tied to pearl quality are discovered and P. max is narrowly bred, thereby reducing genetic diversity, will not a farm’s entire population be susceptible to the same sort of disaster, whether environmental or disease?

And Another One Bites the Dust

In a not-too-surprising twist today, US-based Modern Jeweler has announced the suspension of its 108-year publication.

The economic calamity that has befallen our friends in the pearl world has not been forgiving to those who cover the news. One wonders who or what will be next. Is the recent feeble pearl reporting by JNA a sign of the end? Will any remain when the world turns the corner?

In a letter from Tim Murphy and Cheryl Kremkow we read the following message:

"After 108 years of serving the jewelry industry, Modern Jeweler is suspending publication. We'd like to thank all the people who worked hard over the years to make every issue worth reading. We'd also like to thank the retailers and manufacturers who shared their time and expertise with our readers each month. We hope to find a buyer who believes in the future of the jewelry industry as much as we do. But even if we don't and the August issue of Modern Jeweler is truly the last, we are sure that the jewelry industry's strong community and generosity of spirit will ensure its recovery is swift and its future is bright. We'll certainly miss being there to cover it."