Hi Pearl Lovers!
2023 is now behind us, and for all of us in the pearl industry I have gotta say – it was a teensy bit turbulent! The current trends have been developing ever since lockdowns eased up and international commerce started recovering.
We noticed that it was getting harder and harder to buy staples like White South Sea and Hanadama Akoya pearls. Tahitians started to get scarce.
We noticed prices getting higher.
And higher still!
And collectively we all were wondering … what’s going on here??
I thought I’d spend some time talking with you all about how this transpired and what it portends for the pearl industry heading into 2024.
I wish I could say that the impacts of Covid and the lockdowns are long gone and we can just put that craziness behind us.
Unfortunately, it looks like this simply isn’t the case.
In the pearl farming industry, it’s usually 18 months to 2-3 years to harvest from the time of nucleation/seeding the oysters. Because of the “lag time” the pearl industry experiences between seeding and harvesting the pearls, oysters that were ready to be seeded in 2020/2021 were either left barren during Covid, or died due to lack of technicians to take care of the farm population while travel restrictions were in place.
Essentially, all around the world entire harvests were either not seeded, or the oysters died.
Travel restrictions slammed into place heavily effected overseas farms in French Polynesia, which traditionally employs a lot of Chinese technicians. Many smaller farms simply closed up shop due to lack of employees to keep the operations going.
As it’s only been 2 years since lockdowns eased up, recovery has been and will continue to be slow for the smaller family-owned farms that need to build up all the capital needed to reopen their doors again.
Meanwhile, larger pearl farms have taken over a majority percentage of market share supplying the world’s demand for cultured pearls. This is not … ideal, to say the least.
While the remaining farms have been able to make record sales receipts at the auctions overseas, the overwhelming demand for pearls has almost outstripped supply. This has left buyers and retailers scrambling to find alternative reputable sources for retail customers throughout the US and Europe.
Meanwhile, in China …
The fast growing and increasingly wealthy population of China has an insatiable lust for pearls.
China has a thousands-years old love affair with pearls, so it is not surprising that they are driving the incredible demand for high quality pearls of all types, particularly Japanese Akoya, White South Sea and Tahitian pearls.
According to Jewellery Net Asia, the Chinese population is the #1 purchaser of cultured pearls and pearl jewelry in the world, followed by the United States and Europe.
In 2022, retail sales totaled over $3.3 Billion, and shows zero signs of slowing down!
The insatiable demand from Chinese buyers has contributed to the high price increases in all pearl types across the board, a trend which has been steadily more noticeable for perhaps 2-3 years. This has left US and EU buyers struggling to pay the premium prices that the new market demands, with wholesale prices so far increasing 100-200%, depending on the pearl type.
Via JCK Magazine, which interviewed Ashwani “Sonny” Sethi, CEO of Tara Pearls in New York on the current state of the pearl markets:
“He (Sonny) recounts a dramatic example of the enormous appetite Chinese buyers have for pearls from the annual—and eagerly anticipated—Robert Wan pearl auction that takes place at the September Hong Kong show."
"“He was holding an auction when we were in Hong Kong, and the night before, some Chinese guy came and bought the whole auction from Robert Wan,” Sethi says. “The auction was canceled.””
Overall, the prosperity of China and the astonishing (can I say voracious again?!) demand for cultured pearls has definitely rocked retailer boats in the US and Europe. This has obviously impacted cultured pearl supply and prices across the board, and industry experts are not confident that this trend is showing any signs of slowing or reverting to the old norm for the foreseeable future.
Going forward in 2024, expect high prices and limited supply of some of our favorite pearl types to continue (and on behalf of all pearl retailers and jewelers: we're sorry!).
Multiple pearl industry insiders and industry leaders have predicted that this period of intense instability to begin settling down within 2-3 years. Smaller farms will begin to return to market loosening supply restrictions, and new harvest volume will begin to catch up with demand.
While we wait to see the 2024 pearl harvests to determine the beginnings of industry stabilization, it's important to note that at this point only a literal deluge of cultured pearls will come close to lowering the current pricing paradigms once we understand the buying appetite overseas …
It is heartening to see struggling independent farmers, as well as the larger names we know and love, begin to thrive with the influx of much needed capital after the devastation of Covid lockdowns. I know I can say for all of us in the pearl industry that we love our independent farmers, and we understand what a labor of love farming pearls really is!
So while we can grumble about market disruptions on the one hand, I'd like to give a huge shout out to these unsung heroes, and my own personal cheers to their unexpected but SORELY needed capital influx over the next year or two.
At Pure, we will continue to do our best to stave off drastic pricing increases as long as we possibly can, while still doing our utmost to source some of the highest quality, most beautiful pearls in the world.
We are a family-owned, boutique pearl specialist that focuses only on fine pearl jewelry that operates on a very thin margin. We buy our pearls in bulk directly from our sources overseas - whether that be from pearl farmers or at auction - rather than purchasing single strands like brick and mortar jewelers do, so we are able to bring down our retail prices considerably over other jewelers by simply not giving our pearls the traditional 300-500% mark-ups.
We do not run expensive advertising campaigns.
We do not operate a high-end retail showrooms, and stick to online sales only.
We maintain as low of an overhead as possible. We will continue to do so.
Pure Pearls has weathered some very interesting times since we've been in business ... the 2008 Crash, Covid, and now this market shake-up vis-a-vis China, and we've always survived and even flourished. We promise to you that we'll continue to do all of that and more in the coming year(s) ahead, while still selling luxury quality pearl jewelry at extremely competitive prices.
We will continue to hold multiple sales events for all the important holidays (and even some sales just for a lark!), as well as our Weekly 20% Off Product Features to give all our customers a chance to purchase our most popular pearls at a choice discount.
While market forces are a bit beyond our direct control, we pledge that we will do everything we can to ensure our clients will continue to get the absolute BEST value for their money, no matter what's happening around the world.
Buckle up, and stay tuned!
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