[pbazar]

I just returned from Tahiti from a buying trip. The price of lower and medium quality pearls are definitely down the price of larger and Gem quality pearls are not lower. The price of the latter pearls in US dollars is in fact up since for the last 5 years or so Tahitian pearls have been sold at auction in Euros . The reason is that demand in the US is down this spring. Retailers came off a disappointing fourth quarter and have been reluctant to restock going into spring. The pearl Auctions had a lower percent of lots sold and those pearls are still on the market.

There are a lot of 8mm -10mm pearls on the market right now and I was able to get some great deals. The weak dollar high gold and energy prices plus a poor economy hurts the whole world and Tahitian Pearls are not immune.

The up side is that I have a large quantity of nice pearls at prices never before available.
I hope to introduce retailers and consumers to Tahitian pearls that have thought they were to expensive. With strands starting at $300 retail and earrings at $50 in the long run the market for Tahitian pearls will certainly grow.

[DFrey]

Even though I like a government conspiracy as much as the next guy/gal its not clear that anyone in the Tahitian government needs to turn a blind eye for many kilos of pearls to appear in the marketplace that have not gone through government inspection. Some enterprising anarchist/ entrepreneur just needs to smuggle them off the island.
DFrey

[Richard W. Wise]

[quote=pbazar;31487]I just returned from Tahiti from a buying trip. The price of lower and medium quality pearls are definitely down the price of larger and Gem quality pearls are not lower.

There are a lot of 8mm -10mm pearls on the market right now and I was able to get some great deals. The weak dollar high gold and energy prices plus a poor economy hurts the whole world and Tahitian Pearls are not immune.

PBazar,
I am a little confused. I take it you are with Imperial Pearl Syndicate? Do you mean that the 8-10s are or are not cheaper and are they cheaper only in lower qualities but not gem quality?

[pbazar]

8-10 are from the first operation as such are more plentiful

11 up come from the second operation or third and are in short supply relative to 8-10

Therefore the over supply is in the smaller sizes.

The larger pearls the price is not depressed nor is the price depressed for as some refer to as hanadama.

The best goods never fluctuate and with the weak dollar may cost more.

I hope that is clear.

[Ashley]

I gathered that is exactly what was meant, and certainly makes the most sense... A Grade Tahitians still only constitute a certain (small) percentage of any harvest; pricing on Gem quality and larger, hard to culture pearls wouldn't go down just because the market is flooded with lower quality goods I would venture

[pbazar]

Richard you must have a lot of years in this industry I am president of Imperial which is now Imperial-Deltah but Imperial Pearl Syndicate was last used in 1977.

[jshepherd]

The larger pearls the price is not depressed nor is the price depressed for as some refer to as hanadama.

The best goods never fluctuate and with the weak dollar may cost more.

I think this really depends on how you buy. If you are looking for a top-gem lot only from a broker, they are bound to charge you a premium. But if you are buying mixed "A" lots which will export as A/B, there will be anywhere from 40-60% that will drill or set perfectly clean.

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.

[knotty panda]

Originally Posted by jshepherd

I get the feeling you know the answer to that question

Not I, my dear. I live on the other side of the world. Just making various observations and deductions. It seems Paspaley has a wonderful way of working their business and maybe someone would like to copy it in their little corner of the globe.

[knotty panda]

Originally Posted by DFrey

Even though I like a government conspiracy as much as the next guy/gal its not clear that anyone in the Tahitian government needs to turn a blind eye for many kilos of pearls to appear in the marketplace that have not gone through government inspection. Some enterprising anarchist/ entrepreneur just needs to smuggle them off the island.
DFrey

I've got a feeling that is easier said than done.

[pbazar]

Jeremy
It seems that you concur with my observation as to the scarcity of larger sizes and the abundance of smaller. I never buy at auctions as you say the prices tend to be high. When you buy whole lots you are right it would be hard to really know what value would be attributed to each grade and size. I prefer not to buy whole farm lots I find them wasteful and I can generally break them into the grades I need at the time. This gives me a better Idea of what the market price is. I also tend to need tremendous quantities of certain types
of pearls to satisfy volume retailers. Over time I have found a way to work. I usually cannot buy Tahitian from Japanese or Hong Kong dealers but I can and do split harvests with them so they get what they want I get what I need. Since I just returned I can just report it is a good time to buy 8-10

[Richard W. Wise]

Pbazar, Jeremy

Not all that much time in the industry, thirty years, but I am from R. I. Excellent post. I am way on the other side of gemstone buying. Just bought a matched pair of natural top gem Burmese rubies. No lots, no A, B or C. The Euro-dollar factor was not a factor. They were one of three fine matched pairs I had seen in 20 years so naturally I had to buy them.

Buying cultured pearls I can see that I should have paid more attention in math class. The calculation is quite different though facinating nonetheless sounds like it requires dazzling footwork.

I would love it if you would do a cut/paste and put your post in the comments section of my blog or alternatively give me permission to post. Lots of readers who don't come here but might with a link.

Thanks again, both of you, for the useful clarification

[Josh]

Geez, That's what you get for playing hookie. Sorry that's a vague reference to a recent post about Pearl-Guide being like school.

First off: Richard I was horrified to read that you sent me an email and I didn't respond. I get about a 100 spams a day and sometimes baby gets tossed with the bath water. I enjoyed meeting you very much in Tucson and when I didn't hear from you figured that you were as crazy busy as I was. Glad to be back in touch and thanks for the mention on your blog.

Secondly, thank you Heidi for being a pearl and sending me a heads up email. Yes, been a busy time.

I'm like Dfrey in that I love a good conspiracy when I can find one but I think that giving our gov over here that much credit is too much of a stretch. For those of you who missed it on Yahoo news, we have had SEVEN changes of president in FOUR years down here. I'm hoping that the last one (who I met last night and gave a ball cap to incidentally) will be the last for a while. I think there is back scratching that goes on and for sure Knotty, the little farmers are far less likely to get that itch satisfied. Maybe if my name was something like Bob Vaughn I wouldn't have an itch at all.

Our pearl promotion board (www.perlesdetahiti.net) is doing the best they can, without a doubt, but at the risk of getting in hot water again though I can't keep my mouth shut and gotta say that the traffic of pearls under the radar must stop. It blew my mind in Tucson to see the amount of bogus pearls that the market was gobbling up. There is no way that all that is pre-export control stock that hasn't been absorbed yet.

Airdancer, there has been much talk here of a "Maison de la Perle" that would work as sort of cartel that pearls could funnel through and thus stability could begin. For now it's just been talk but if there is substantial info I'll let the board know.

I think that Jeremy brought up a really good point that is pretty hard to guess from an outsider's perspective. A number of years ago there was a number of factors that came together to produce an amazing boom year for natural spat collection. Prices of to-be-seeded oysters dropped and everyone grafted like nuts. This was also shortly after the approximate 40% increase in prices after the big shake out that followed our crash in 2003. Basically we all thought that things were on the mend, oysters were cheap and everyone that survived the storm was out in the clear again thus lending the collective confidence to re-invest anew.

That all brings me to another interesting point that you pretty much HAVE to be on the ground floor to see. A few years ago all across the Tuamotus (where the vast majority of farms are in operation) and to the Society islands there was phenomenon that can only be explained by the name of collective consciousness. The rays, turtles, triggerfish, etc all at once, within a period of only a few months, turned on us. Sorry to get anthropomorphic on all y'all but that's what it felt like. For some reason, across vast distances the predators that have let us farm our oysters peacefully for years suddenly realized that all they had to do was look up to find an amazingly abundant and unprotected food source that had been there the whole time. In one year we lost nearly half of our entire oyster stock. I have neighbors who had entire lines of seeded (the most expensive kind) oysters devoured. This was the proverbial straw for more than one farmer.

So what did everyone do? They protected their oysters with wire baskets and unknowingly set themselves up for the equivalent of a right hook after an upper cut to the jaw. Protective baskets didn't always get cleaned but unlike the simple strings most of us used, the baskets were not so forgiving. Pearls were dramatically smaller, color went down as did shape and most certainly quality. Protective baskets seemed so great at first because all of a sudden you had all your oysters again. The fouling on them however turned many into coffins. Mortality rates went through the roof as oysters struggled to breathe, let alone feed. Those that didn't die were a shadow of their predecessors with pearls that corresponded.

What does comfort me about this fairly black (pearl) thread though is that it confirms my deep conviction that a quality pearl will always retain it's value, despite the woes that a farmer and therefore market may be subjected to.

[Mikeyy]

I am wondering. Has anyone ever put a graph together showing the history of pearl prices over the past say 20 years?

[pbazar]

Richard feel free to use any of my posts you would like. As to your purchase of Burmese ruby since joining the board of the AGTA my world of Gems and there social and political ramifications have been thrust on me. First congratulations on a purchase of your unique gems. As you know all product emanating directly from Burma (Myanmar) is now banned. While some of the rubies may have originated from Burma, so long as they were cut in Thailand (or any other country) allows them to be legally imported into this country under the U.S. Customs ruling governing “substantial transformation”. While there is discussion taking place in the U.S. Congress about eliminating this exception, until such legislation passes, the rubies are still in full legal compliance with United States law. As the pearl person also (Betty Sue King) I have learned a lot. In fact Paraiba is now part of my life due to the controversy over the use of the term. Pearls are so simple!

Josh as to government instability while I was in Papeete (sorry I Missed You) I meet with my friend Martin Coeroli and Michel Yip minister of pearls and the new minister a nice young man that had only been in office a week .

We discussed the present situation. I reiterated the story of pearls in Sudan and how even though all conditions were perfect for culturing pearls the farm failed because without good government pearls cannot prosper. It was a very interesting meeting. I hope Martin
continues to promote black pearls.

As a bonus I was there for festivities leading up to Hinatea Boosie being crowned the 48th Miss Tahiti. It made the Sheraton a mad house.

Sudan story

http://www.pearls.com/news2/pp24/Sudan.htm

Miss Tahiti

http://www.tahitipresse.pf/index.cfm...e=23877&lang=2

[pattye]

Thanks much, as always, Josh for your interesting and enlightening posts. Love my Kamoka pearls!

Pattye
so many pearls, so little time