Pearl Prices on the Rise

As the world economy fluctuates to agree or disagree with dire predictions, one thing is certain: pearl prices are on the rise. While this is welcome news for the world’s producers, beleaguered wholesalers and retailers are bracing for another shot at the bottom line.

As Chinese freshwater pearls are sold by weight, producers have spent much of the past few years focusing on sizable, more profitable production, largely ignoring the smaller range of pearl. This has lead to a sharp decline in the availability of smaller Chinese pearls, 7mm and below. Combining this shortage with the markedly increased labour costs and the labour-intensive job of processing small pearls is leading to drastically higher prices, as high as 200% greater according to a report in JNA.

The 49th Robert Wan Tahiti Perles Auction attracted a total of 94 buyers, 50 of whom purchased a total of 166 of the 468 available lots. While many lots remained unsold, the average selling price reached a remarkable €39 per momme, more than 35% higher than September 2009. Following the results of the auction, producer Robert Wan proclaimed that “the worst is behind us now, and the September 2010 auction will deliver better results.”

Not to be outdone, the Third Gerdau Pearl Auction (formerly known as The Paspaley Pearl Auctions) fetched US$7.91 million, up 36.14% compared with September 2009, with average per momme prices increasing a full 34%. Of the 100 attending buyers, 72 made successful bids, purchasing 211 lots comprising 110,028 pearls.

According to Mr Leung Sik Wah, director of Cogent Trading Co Ltd, average per pearl prices were up 15% year over year. He is now confident pearl farmers will have the ability to maintain their businesses.

Conspicuous Consumption

by Perlemeister

Not so sure I feel so sorry for our pearl industry anymore, after running into a very vocal and verbal anti-pearl pugilist at a pearl counter a few weeks ago who said to me when I told him who I was and what I did: “Why would anyone waste their money on crap like this?” (he was looking at Chinese freshwater pearl offerings). He went on to lambaste the incredible volumes pumping out of China and flooding the world market, cheapening the cost and image of pearls.

I segued into asking about Australian or Tahitian pearls. “It’s the same thing,” he said. “All about conspicuous consumption. Greed on the producers’ part, greed on the dealers’ part, greed on the buyers’ part. That’s why the business is going into the tank.”

“And here in America, it’s the worst,” he went on. Look at our economy. Look at out leadership.” And he told me about our President’s recent entourage to London, telling me to Google the trip. So I did, and was suitably appalled.

It seems that Our Exalted Leader showed up at the G-20 summit in London with everything but the proverbial kitchen sink, arriving in all pomp and primp with 500 staff, including 200 Secret Service agents, a team of six doctors, the White House chef and kitchen staff with the president’s very own food and water... along with 35 vehicles, four speechwriters, 12 teleprompters, the presidential helicopter (Marine One), and a fleet of identical decoys to ferry him about town. Included in all the vehicle array was the presidential limousine which is reinforced with ceramic and titanium armor, carries tear gas cannon, night vision devices, its own oxygen, and is resistant to chemical and radiation attack.... “sort of a mobile panic room,” a tabloid wit penned. Not to mention its usual retinue of Rayban-clad, earphoned suits carrying hidden flamethrowers, Uzis and RPGs.

That’s the trouble these days. No fiscal discipline. Everyone’s out to get as much bakeesh as possible in the shortest possible time. Not one thought but trying to screw the next person out of as much as possible... even worse when you’re first in line at the trough,” my antagonist concluded.

These thoughts coalesced when I read a recent news article about Nick Paspaley planning a pearl auction next year in the Emirates for his primary clients in Dubai. “Good God,” I thought. “Has he run out of customers in Hong Kong, Tokyo, Sydney and the States?”

“Perhaps folks are coming around to their senses and stopping buying incredibly expensive baubles to hang around their necks,” my anti-pearling acquaintance said to me when I passed that latest tidbit on to him. “Someday those crazy sheiks will come to that conclusion, too,” he added. “When they finally run out of oil and when we stop buying that black stuff.”