Wednesday, October 03, 2007

Pearls Blast Off

source: http://www.jckonline.com/article/CA6486004.html

The pearl market used to be cyclical. It looks as if the cycle has been replaced by a skyrocket.

By Gary Roskin, G.G., FGA, Senior Editor -- JCK-Jewelers Circular Keystone, 10/1/2007
Pearls have been selling strongly for several years, with more pearls and greater selection than ever before, and it doesn't look as if the boom will let up anytime soon. To paraphrase Armand Asher, if Iridesse can open 16 pearls-only stores, what are you waiting for?
Asher, of Albert Asher Pearls in New York, speaks well of Iridesse, Tiffany & Co.'s stand-alone pearl retailer. “If they're taking that kind of risk,” he said recently to an audience of retailers, “maybe now is the time for you to go for it.” If U.S. retailers do go for it, here's what they can expect in the coming year.

South Seas whites
Large, round, white South Seas bead-nucleated cultured pearls—the classics—come from Australia, Indonesia, and Burma, but Asher says the top qualities in anything 14 mm and up will most likely be Australian. Production continues to improve, so numbers should remain steady, and sizes could increase, says Aziz Basalely, of Eliko Pearl Co., New York. “There's a greater supply of larger rounds, 16 mm plus, in higher qualities,” Basalely notes.
Michael Bracher, manager of pearl distribution for Paspaley Pearls in Darwin, Australia, says his company's main focus is quality, and he notes that most Australian producers keep their oysters in the water long enough to produce top-quality pearls. Harvesting early can result in smaller sizes, thinner nacre, and a dull luster. Asher notes that chokers of top-quality large South Seas whites could range from $50,000 to $75,000 a strand wholesale.
Indonesian producers take a different tack. “The general supply from Indonesia has increased due to lesser regulation and governmental control of production,” says Basalely. “Consequently, the overall quality of Indonesian pearls tends to be more 'commercial' when compared to Australian production.” That's good news for U.S. retailers who are looking for more affordable pearls, but note that, besides being commercial quality, Indonesian pearls are usually smaller than 14 mm.

Akoyas
These bead-nucleated pearls, from Japan, China, and now Vietnam, are typically 7 to 9 mm. Demand for perfectly round, perfectly white specimens is still strong, and prices for top-quality akoyas are firm. Because of limited production in Japan, Japanese akoya is hard to come by.
Basalely notes that this year's production of pearls 7 mm or less was tight. Asher says production of larger pearls was even tighter. “The rare 9.5 to 10 mm akoyas—and these are only from Japan—are almost impossible to get,” he says, adding that top strands in this size range can cost upwards of $8—$10,000.
The supply of akoyas in the United States is limited, partly because of strong demand elsewhere. “In Japan, most of the pearl usage is akoya and South Seas black,” says Basalely. “At least 60 percent of the world's production of these is sold in Japan.”
Not all akoyas are from Japan, but most, if not all, are cleaned, bleached, drilled, set, and strung there, and will be labeled “Product of Japan.” Dealers stress that buyers should be more concerned about quality than locality. Chinese akoyas can be fine quality, but examine the goods. “Better quality is very limited,” says Basalely. The majority of the Chinese production ranges from 5 to 7 mm, sometimes 7.5 mm, rarely 8 mm.
Akoyas from Vietnam are in small supply at the moment, but quality is good. Vietnam is preparing to become a major force in the cultured pearls arena.

South Seas blacks
South Seas black pearls from the French Polynesian Islands are called Tahitian. Others are simply South Seas black pearls. These include the Cook Islands and Fiji. We also include Vietnam, where the farming possibilities look promising.
But despite demand, new farms, and willingness to pay, it's difficult to find top-quality South Seas black pearls in the United States, and it will soon get even more difficult to find large blacks. Martin Coeroli, general manager of Perles de Tahiti, sees not only an increased demand for larger pearls ranging from 13 mm and up but also one more increase. “I predict an increase in price in this category,” says Coeroli. Top Tahitian cultured pearls for 15 to 18 mm strands already are priced at $100,000. In 9 to 12 mm strands, $18—$20,000 is likely.
Instead, the U.S. market will probably see a lot of small pearls. “For a number of reasons,” says Andy Müller of Hinata Trading, Kobe, Japan. “They can make smaller sizes by harvesting after only 12 months.” This is less risky than trying to grow larger pearls with longer harvests. “To keep them in for 24 months or longer to get the bigger sizes means you need bigger oysters, which cost more. It's all about risk. It's just easier to go to smaller pearls.”
“Because of the price and availability of the commercial goods, especially circlé pearls, we will see more and more designs in this category,” says Coeroli. Peacock, though hard to find, remains the top color. The most popular variety, and still affordable in the United States, is dark green ranging from 9 to 15 mm. Expect to keep seeing multicolor strands, too.
The Cook Islands, Fiji, and Vietnam aren't producing enough to affect price and availability. The Cook Islands probably produce 10 percent of the French Polynesia output, notes Peter Bazar, of Imperial Deltah Pearls in East Providence, R.I., who has made several trips to the Cook Islands recently. Bazar estimates Tahitian production at approximately 5 million pearls a year. “If only 5 percent to 10 percent are fabulous, then that equates to 500,000 fabulous pearls,” he says. “Now if you're talking about the Cook Islands, well then you're talking about 500,000 pearls total production, and only 5,000 pearls that are really fabulous.”
Bazar continues, “What everyone should understand is that a fabulous pearl is rare. And that should be appreciated. The price of a fabulous pearl always stays high … and there are a lot of pearls that aren't as stunning.”

South Seas goldens
Indonesian and Philippine strands of golds can range from 14 to 12 mm, 16 to 13 mm, and 17 to 14 mm. These were quite rare just a few years ago. Apparently many dealers prefer Philippine golds over Australian and Indonesian golds. For smaller goldens, look to Burma, which produces pearls as small as 9 mm.

Chinese freshwaters
The Chinese are producing big and small sizes and various shapes including round. Round Chinese freshwater tissue-activated (no bead) cultured pearls have taken over the part of the market once dominated by small akoyas. Costs are substantially lower and selection huge for 5 mm and smaller rounds and off-rounds. The Chinese also are going after the large-round market. Rounds of 9 and 10 mm, scarce a few years ago, are readily available today. Rounds of 13 and 14 mm also are available, but at some cost to quality.
To obtain top-quality CFWCPs, buyers have to go to China and buy direct. “The supply has changed. The demand is high,” says Asher. “If you are at the farm immediately during the harvest, you find the better freshwaters. Prices don't drop, but you at least get the goods.”
To increase size, the Chinese have been working on spherical-bead-nucleated freshwater pearls. “Most of the production of these nucleated pearls tends to be baroque shape,” says Basalely. “For these pearls, 14 mm and above, the prices are extraordinarily high for freshwater, comparable to those of South Seas baroque pearls.”
In fact, Asher notes that while nice strands may be available at $1,500, single loose pearls can be as high as $1,000. Top-quality strands of 10, 11, and 12 mm perfectly rounds can go as high as $25,000.

American pearls
Supplies of U.S. top-quality (nonspherical fancy-shape bead-nucleated) freshwater pearls are still available, but competition from Chinese products is fierce. In the early 1990s, the Chinese realized they also could produce fancy shapes and created tons more product. Gina Latendresse, owner of American Pearl Co., Nashville, Tenn., says her company is not at the capacity it once was. “Our last commercial harvest was 89,000 pearls, and that was a small harvest,” she says.
Company founder John Latendresse mandated that 10 to 15 percent of every year's harvest be set aside for the future, and for 20 years the company has done so. “The one thing you can expect is the quality of the American pearl,” says Latendresse. American Pearl offers only natural colors in designer shapes, especially coins and bar shapes, with a minimum nacre thickness of 1.3 mm.

Going for Baroque
When size collided with price a few years ago, in came baroques, which made it possible to own larger pearls for less money, as long as consumers could appreciate baroques' unusual shapes. Consumers could, but baroques are in short supply. Improved cultivation techniques have increased the number of round pearls, reducing the supply of baroques, which are usually from a second- or even a third-generation growth from the same oyster.
“There is an especially strong demand for large baroque pearls, but the availability of 15 mm and up is low, and prices continue to rise,” says Aziz Basalely, of Eliko Pearl Co., New York. So although the actual value of a baroque pearl is lower than that of a round, demand for baroques has boosted their prices to nearly those of rounds of similar size. If you do go for baroque, think luster. “I love a fabulous baroque pearl,” says Peter Bazar, of Imperial Deltah Pearls, East Providence, R.I. “It's obviously all about luster and not shape.”
Armand Asher, of Albert Asher Pearls, New York, notes another option: “Many buyers are willing to go the route of slightly off-rounds, or what's called slightly pinched, such as buttons.”
Economic Reality of Top Quality
The continued weakening dollar matched against the euro and the yen creates healthy buying markets overseas, resulting in a scarcity of top-quality pearls in all categories in the U.S. market. In fact, more international buyers are coming to the United States than at any other time in recent history, trying to snatch up that bargain strand.
But a weak dollar doesn't mean the U.S. market doesn't have nice pearls. It just has fewer, and prices on those are very competitive. In top qualities, single pearls and mixed-origin strands are more available than full strands of the very best from one locality. “On top of that, the mass market of the U.S. likes to buy not the top 5 percent, but somewhere in the middle,” says Peter Bazar, of Imperial Deltah Pearls, East Providence, R.I. “Europeans have always bought the top-quality gems.” Bazar confirmed that while many Europeans look at gems as an investment, the majority of U.S. consumers look at price points.
“There's no question now that there's a shift in economics,” says Joel Schechter, chief executive officer of Honora, New York, specialists in Chinese freshwaters. “European markets are getting stronger. The change in the dollar obviously has a big impact on the exchange rates, and on the clientele.” And because of that, Schechter sees a large amount of fine goods ending up in Europe. “And a lot more medium goods being sold in the U.S.”
“People like Tara and Assael are still bringing in the finest in the world,” says Bazar. But it's usually Asian money that buys the multimillion-dollar strand of pearls. “Maybe some of the Europeans and some of the Asians recognize the value of pearls at the high end more than those in the U.S.”
Martin Coeroli, general manager of Perles de Tahiti, agrees. “The weak dollar is part of the reason.” Coeroli notes that the nouveaux riches from emerging markets like Asia, the Middle East, and Eastern Europe, are ready to spend more money for the finest goods. So you will also see their suppliers buying at the source. “International (mostly Japanese and Chinese) pearl wholesalers are buying directly from French Polynesia versus most American pearl dealers who are buying in Asia.”
Even then, the Asian market is tough. “More and more smaller European and Asian independent companies are attending auctions, and bidding only for the top quality,” says Coeroli. “It is becoming more difficult to get top goods because of the increasing competition among the buyers.”
But Bazar isn't worried. “The U.S. still is the biggest market in the world for pearls. We still have the wealth.”

Growing a Brand, Branding a Growth
Pearl wholesaler Honora has been on QVC home television shopping for 10 years and last year opened its first retail store, on 57th Street in New York. We asked CEO Joel Schechter how the company can maintain its independent retailer customer base and sell retail at the same time.
“TV to us is really not retail,” says Schechter. “We have one customer only—QVC. They buy it, they own it, and they stock it. It is really their retail business.”
Schechter acknowledges that retailers were upset the first year with Honora, but he says 10 years on QVC has elevated the Honora brand—to the benefit of retailers. “With all the hours we're on, with our logo up there, with me as company president up there being able to explain my company's position, it allows us to get our name out to the public,” he explains. “Now, after every QVC event, we see a spike in retail sales all over the country.”
He adds, “We have to keep the product separate and make sure that what gets sold on TV cannot be sold in retail stores, and vice versa.”
As for selling to the public at the 57th Street store, Schechter says the point isn't to generate revenue in retail sales. “We're looking to let consumers know who we are and know what we're doing,” he says. “And we hope what's going to happen is that they see it in our store, and then go back to places like Canton, Ohio, and buy it from their local retailer.”
Schechter says the New York store also assists the company in another way: “We get reaction from consumers, which helps us make decisions.” Honora can listen and learn what consumers want and translate that into wholesale products that get delivered to independent retailers carrying the Honora brand.
On the other side of the planet, an American is making history. Jeremy Shepherd, president of PearlParadise.com, with reportedly $20 million in sales last year, says he's the first American to own an akoya pearl farm in China.
The farm, located in Xuwen on the Leizhou Peninsula in Guangdong, is registered in China as Xuwen Jinhui Pearl Co. and Xuwen Pearl Paradise Farm. Xuwen Pearl Paradise is a Chinese-American joint venture for culturing and processing akoya pearls.
Three million nucleated shells are under cultivation in the farm's waters, and Shepherd expects the farm to yield between 1 million and 1.25 million usable pearls by winter 2008. The anticipated culture time of 10 to 15 months should yield an average nacre thickness exceeding 0.50 mm.

Do you know that freshwater leafage and mussels make pearls?

Source: http://in.news.yahoo.com/071002/139/6lfxn.html

By Ram Chand Sahu

Bhopal, Oct.2 (ANI): Very few of us know about the many ways in which pearls are formed. If you want to know the answer, ask Vijayeta Rathore, a young scholar in applied aquaculture from Barkatullah University of Bhopal.
She has developed cultured designer pearls from freshwater leafage and mussels, the first-of-its-kind endeavour in Madhya Pradesh. .
Vijayeta, barely in her early twenties, says that the designer pearl culture is more bewitching but less expensive than cultured pearls normally available in the market.
She says: "If one takes up designer pearl production as a business, he or she will reap rich dividends because pearls market is second biggest after diamonds in the international market. If the designer pearls are of good quality, they will fetch good money."
She says: "These days in the market we have Chinese pearls, Japanese pearls and other types of pearls. These freshwater mussel designer pearls are no less in quality than the available pearls. Indeed, their rates are reasonable."
To make designer pearls, Vijayeta inserts beads with a punched shape of a deity or anything inside a freshwater mussel (that live on the bottom of rivers, irrigation canals and farm dams) collected from the River Vidisha.
The mussels carrying designer beads are then packed in netted bags, which are tied with a bamboo stick and the stick is left in a pond for 15 days.
After 15 days, the freshwater mussels are placed in the netted bags and sent for raft culture (resting in water for a few days) where the beads are gradually covered with nacre layer, Vijayeta explained.
Vijayeta makes flawless pearls as part of her study curriculum. She makes them in the shape of Lord Shiva, Buddha, Ganesha, the Holy Cross and others, shiny and bright with impeccable nacre (also known as mother-of-pearl).
She has plans to commence a large-scale designer pearl business soon.
Among all the students of the Applied Aquaculture Department of University, Vijayeta has conducted pearl culture experiments most successfully.
Dr. Susan Manohar, Assistant Professor in the Department of Applied Aquaculture, of Barkatullah University, said: "We are making pearls in freshwater muscle. Generally, pearl oysters are found in marine water. Now scientists have found ways of pearl production in freshwater mussels. This is happening for the first time in Madhya Pradesh."
Manohar said: "The beads that stuck up with the shells are usually discarded but we are making designer pearls out of them. We give these pearls different shapes like Om, the Taj Mahal, Lord Buddha, Lord Shiva. These designer pearls can be worn as pendants with chains and in other forms of jewellery."
A Pearl is an organic gem, created when an oyster covers a foreign object with beautiful layers of nacre.
Earlier, thousands of oysters had to be searched to locate a pearl as such the pearls were rare and only the fortunate could manage one. Modern science, however, has enabled man to develop pearls through culture process.
In pearl culture, beads made of shell are placed inside a saltwater oyster or freshwater muscle, which is then returned to the water. The oyster covers the bead with layers of nacre and later the pearls are harvested. (ANI)
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