Saturday, May 03, 2008

Crisis In Paradise; Pearl Prices in Tailspin

Had an interesting conversation with Josh Humbert, Josh is the proprietor of the Kamoka Pearl Farm in the Tuamotu Islands www.kamokapearls.com , a far-flung windswept archipelago about 300 miles north of the capital island of Tahiti.

Josh’s farm is located on the atoll of Ahe located 350 miles north east of Tahiti in the Tuamotu Islands. Unlike Tahiti, which is a volcanic island, the Tuamotus are true atolls, flat ribbons of coral surrounding a large center lagoon. Conditions in this far off island group are perfect for the culturing of the Pinctada Margaritifera, the parent mollusk of the black pearl.

20% Price Drop in Small Sizes:

According to Josh, all is not well in paradise. Once more, over production has led to a crash in pearl prices at the source and many farms are in financial trouble. You may remember a similar crash in pearl prices about five or six years ago. The last time we were able to offer fine black pearl strands at bargain prices and consumers lapped them up.

Another exceptionally knowledgeable source tells me that the oversupply is mainly in the smaller 8-10mm sizes, pearls in the 11mm+ range are hard to come by and prices are actually higher. At the March GIE auction in Papeete asking prices were high and very little sold. Most lots sold privately, post auction, at prices much lower than the advertised floor prices allowing GIE to claim a successful sale. Pearls in the 8-9 and 9-10mm sizes have dropped approximately 20%.

Don’t expect to see these falling prices right away. Prices at the Las Vegas Gem Shows should reflect the prices on older stock. Unless there is a rebound, these price cuts should trickle down by this fall. Stay tuned...




Book Review

By Richard W. Wise, G.G.

©2008


Gems & Mines of Mogok

by Ted Themelis

Hardcover 352 pages

Self published 2007

For gem enthusiasts, Mogôk is the Holy Grail. This beautiful remote valley together with Afghanistan’s Sar al Sang, is the oldest continuously productive gem district on earth. If there is anything you didn’t know about the gems or geology of Mogôk that was not covered in his previous volume, Ted Themelis’ new book "Gems & Mines of Mogok" has got you covered.

Themelis’ previous book Mogôk, Valley of Rubies and Sapphires published in 2000 focused on the history, people and as the title suggests the fabulous ruby and sapphire produced in the valley. In this new book Themelis turns his attention to the Geology, Mineralogy, Crystallography and mining of the diverse gemstones and minerals found in the Mogok Valley. The book is profusely illustrated with charts and maps of tectonic models and geological models, satellite images together with topographic and geological maps.

Themelis starts right off in Chapter 1 with a comprehensive historical overview of the geology of Mogok replete with a proposed model of the tectonic evolution of the region accompanied by an imposing array of illustrations: a Timetable of Rocks and a two page color Geological map of Mogok, photographs of geological features and rocks divided by type; igneous, pegmatitic, metamorphic. In short, a geologist’s compendium coupled with a rock hound’s field guide to the region.

Most books in this category focus on ruby and sapphire, skipping lightly over the many rare and interesting gems and minerals produced in this complex geological environment. In Chapter 5, Themelis profiles and provides photographs of some sixty gem species and varieties, everything from amblygonite to zircon. In appendix D he provides a handy gemological property chart of the twenty-one most important gemstones complete with refractive index and other key identification criteria. (above right: 8513: 2.09 Natural Mogok Burmese Ruby from the R. W. Wise Collection)

There is something for everyone: For the lab gemologist, photomicrographs of inclusions and descriptions of ruby, sapphire and peridot; for the mineral collector, descriptions and images of a large number of mineral specimens by sub-regions; for the ruby-sapphire aficionado an illustrated discussion of origin determination; for the crystallographer a images and illustrations of crystal habits. Appendices cover treatments of Mogok ruby and sapphire, Burmese gem-jargon, a list of gem mines with latitude-longitude followed by a nine page bibliography.

The book is an awesome, genuine tour de force, buy it! Better still, buy both volumes for $199 and Themelis will throw in a free CD. www.themelis.com . For immediate delivery in the U. S. contact: Mr. Bill Dunn at Hypatiagem@aol.com

Take a boat ride across an exotic lagoon. Visit a black pearl farm and learn how black pearls are farmed and graded.

Follow me on gem buying adventures in the pearl farms of Tahiti. Visit the gem fields of Australia and Brazil. 120 carefully selected photographs showing examples of the highest quality gems to educate the eye, including the Rockefeller Sapphire and many more of the world's most famous gems. Consider my book: Secrets Of The Gem Trade, The Connoisseur's Guide To Precious Gemstones.

“Wise is a renowned author... He’s
done a marvelous job of this first book, monumental work, a tour de force...My recommendation: Buy this book”.

Charles Lewton-Brain, Orchid

whether you like to know what the best colour is in Tanzanite, or how to grade a Diamond, you will find it in this book. No other book I read before dealt with this topic is such detail as Richard Wise's masterpiece."

A. Van Acker, FGA
Amazon June 2005

"Secrets Of The Gem Trade: The Connoisseurs Guide To Precious Gemstones by Richard W. Wise is an impressive new reference for dedicated dealers and collectors of gems, gemstones, and ... pearls. Introducing and descriptively exploring each and every gem covered in the easy-to-use reference, Secrets Of The Gem Trade contains an illustrated summary of each stone inclusive of its history and general information, hue and tone, saturation, which may be noticed as the finest, an understanding of the particular gems rarity, and the caution for synthetics and how to depict them, however depending upon the stone there may be description of clarity, color fading, multi-color effect, etc. Secrets Of The Gem Trade is very highly recommended to anyone interested in gemology as a superbly organized, authoritative, comprehensive, and easy-to-follow reference."

Midwest Book Review
April 2006

Only $35.95. Read a couple of chapters online: www.secretsofthegemtrade.com.

Buy it on Amazon: www.amazon.com


5 comments:

Jeremy Shepherd said...

The volume is up in the smaller sizes because these are first-graft sizes and a few years ago there was more available shell for farmers to graft. The volume of second and third graft has dropped dramatically because the market prices cannot sustain the cost. With second and third grafts there is a lot more cost involved and the attrition rate is a lot higher. Also, the pearls produced typically have less luster and relatively poor color. Because volume is so low, market prices in larger sizes are going up. The market might even be starting to correct itself in that range.

As for the smaller sizes, the prices have fallen significantly. This crosses all quality scales as pearls are not initially sold in separated quality lots. They are sold just as they come out of the water; separated by shape and often size (8-10 mm lots and 11 mm+ lots), but the quality covers the gambit. Those prices have fallen and those prices translate to all grades. This is not as noticeable to US buyers as the value of the dollar has fallen as well.

For US buyers the prices have appeared to be somewhat stable. But that is not taking into account what is happening to the US dollar's value. The dollar has been dropping so prices on the smaller sizes have appeared stable, maybe even slightly lower than what they were just a year ago. That equals a significant drop.

At Poe Rava Nui the auction floor prices were in Euro. More than 90% of the pearls on auction were 8-10 mm lots (total range of 8 mm to 11 mm). The most heavily bid lots were the commercial lots C through D. The higher-quality lots did not receive a lot of bids except for the exceptional-color lots. Even though the floor prices were in Euro I found them very attractive. The export tax was already included. In the end we won seven A/B lots in round, medium dark and dark color without much competition. Other buyers told me they felt prices were about 20% lower than expected, and prices are usually higher at auction than they are at other venues.

On the flip side, we have had an incredibly difficult time securing lots of larger, 11 mm plus pearls. Over the last couple of months we have worked with a number of people in Tahiti and even Hong Kong trying to find them. We finally settled on two lots last week and paid about 25% more than we have historically. All together it only came to about 1000 pearls, half of which are going to back orders.

Richard W. Wise said...

Thanks Jeremy,

Jeremy Shepherd knows whereof he speaks. He is President of Pearl Paradise, www.pearlparadise.com. one of the most successful pearl retailers on the internet.

For a lively discussion of all things pearl, visit: www.pearl-guide.com/forum

VEL said...

It has been a dream of mine to also work on a pearl farm. Beautiful beach and pearls. What a perfect match!

Richard W. Wise said...

Vel,

You might find the account of my visit to the pearl farms of the Tuamotu islands of interest. Read about it in Secrets Of The Gem Trade.

Richard

VEL said...

I have a great interest in pearls. It was my first real love and my first real treasure aside from the people I know of course.

Can't wait to find your books in the local bookstores. Any pictures of beautiful beach and lustrous pearls makes me drool.

I even told my parents many times that I would like to go to Sulu bcoz it is believe that the Sulu Archepelago is the most beautiful body of water in the world as claimed by a foreign tourist on his visit. Even though Abu Sayaf rebels are somewhere around the area but I still consider visiting the place in my lifetime and I even joke to my parents that Abu Sayaf may kidnap me but they can't afford to kill a beautiful creature. (Laughs)

"Pearls lie not in the sunshine. If you desire one, you must dive for it." Old Chinese Proverb

And I wanna dive for Sulu pearls!!!