AKOYA Pearls Industry and Market Analysis
Let’s start with the JAPANESE AKOYA pearls, which have a hundred year long history. Pre-WWII production peaked out in 1938, with a recorded volume of 1 tonne. After the war, production resumed again in 1952. Soon after, it was declared an “Industry of National Importance”, shifting into overdrive, bringing in much needed foreign currency.
As we saw in a previous chart, Japan produced 600 million dollars worth of akoya just 16 years ago. Today, it is down to an estimated 65 million dollars (with high estimates at 70 million). Japan’s akoya production peaked out in 1966, with approximately 230 tonnes, and a market share of close to 100 percent (monopoly!). It never managed to recover. Today’s production, estimated at 12 to 15 tonnes, is just about 6% of what it was back in 1966.
Japan, the founding nation and the very pioneer of the cultured pearl, having run a monopoly for decades, seems to breath its last oxygen. Many must be asking WHY?
There are three reasons, listed by order of importance:
- First : COMPETITION (South Sea, Tahiti, FWP)
- Second : COST of production
- Third : POLLUTION of the sea (Some of my colleagues might also mention the “Image and Quality Problem”, a very controversial argument we don’t need to enter now).
Competition, only partially self-inflicted by the Japanese themselves, is by far the most responsible culprit. When consumers were offered an alternative to the akoya, they jumped on it!
The cost factor too, is very important. Like in any other Japanese export orientated industry, the exchange rate played a major role. During the first 25 years of akoya production after WWII, salaries were low, and one dollar bought 360 yen. Today, salaries and costs are high, and one dollar buys less than 100 yen. This costing problem coincided
with the increased competition from pearls farmed abroad, with the result that the sustainability of the entire Japanese akoya pearl industry is now questionable. The problem of sea pollution also plays a certain role, but is of least importance. Today’s sea conditions are less favourable, thus adversely affecting the health and sturdiness of
the oysters. The much talked about productions of akoya pearls farmed by China, South Korea and Vietnam are usually over-rated and exaggerated. These productions never posed a serious threat to Japan. The stories around them were often far-fetched and inflated, and most of the time out of context. In many cases, they were the brainchild of sensational journalism.
The obvious question is: How will the future hold for Japan as a pearling nation? To answer this, one has to differentiate between:
Japan as:
- the leading producer nation of akoya cultured pearls
- the global Trading Centre for all kinds of pearls
- a Pearl Consumer Nation.
As a Global Pearl Trading Centre, Japan is predestined to maintain its #1 position. Admittedly, more wholesale auctions are nowadays held in Hong Kong, than in Japan. But it is an undisputable fact that the largest buyers’ groups at those raw-material auctions are from Japan (Kobe and Ise). Only Japan can offer these key elements in one single basket:
- Professionalism and Know-How
- Capacity
- Tradition
- Reliability
- International Customer Base
Don’t get us wrong; nothing against our pearling friends from HK and China. But when it comes to “sensibility, touch and passion” for our product, the Japanese, with their tradition and history, rank first. Another underlining fact in favour of Japan is its domestic market. Even though reduced, it still ranks among the very top in the world.
When it comes to the farming of akoya, the picture looks rather bleak. It is our belief that at least part of Japan’s akoya farmers will survive, because they are in the process of moving into a “Niche Business”. The remaining farms will be small in scale, kind of “Mom and Pop Operations”. Proud of their product and origin, some will be selling their pearls with a kind of “Appellation Controlée” label. They will be operating off the mainstream, selling a specialty, a one-of-akind, for which there will always be a demand. If you are a pearl dealer, you better grab it! Volumes are down, prices are reasonable, and one is getting good value for money!
Article source: Andy Müller, Kobe/Japan, as presented at the European Gemmological Symposium in Berne, Switzerland on June 5th, 2009