Pearl is an organic “gem”, that is, a gem that comes from a living thing (other examples of organic gems include coral and amber).
A pearl is a living gem, and each pearl is a miracle of nature. It is a lustrous concretion (i.e. a rounded mass of compact concentric layers built up around a nucleus) produced by certain bivalve mollusks, including mussels and oysters.
The pearl is an abnormal growth resulting from the invasion of the body of the mollusk by foreign matter.
The oyster soothe irritations caused by those external or internal stimuli (such as sand grains, mollusk eggs, parasites and other foreign particles) by secreting a brownish solution called Conchiolin. Conchiolin is a fibrous protein that makes up the inner part of the oyster shell.
Over this conchiolin, the oyster coats the invading material with layer upon layer of nacreous material. The conchiolin binds the nacre together. Nacre is the hard pearly internal layer of the oyster shells. It takes thousands of very thin layers of this nacre to make a single pearl.
Each pearlis made through a biological process inside the oysters. A pearl is made of thousands layers of conchiolin.
The materials making up the pearl is secreted by the mantle (i.e., the part of the oyster’s internal body with glands that secrete a shell-producing substance) as the response to the irritant material. It is a remarkable feat of nature that a living oyster produces such an exquisite work of art.
Since pearl is made through a biological process inside the oysters, no two pearls are identical. It is understood then why the Latin word for pearl is margarita which means “unique”. (In the romance languages (Spanish, French, Italian), margarita means pearl).
Nacre, also referred to as mother-of-pearl, is composed primarily of aragonite crystal.
Aragonite crystal is a solid material in which the component atoms are arranged in a definite pattern and whose surface regularity reflects its internal symmetry. The crystals that are lined in symmetry within layers making up the pearl create prismatic effect as light travels through each layer. This prismatic effect contributes to the light-reflecting qualities of pearl known as its luster and iridescence.
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Pearls have been known to mankind since the beginning of civilization. They were considered as one of the most valuable and to this day are still highly esteemed as gems for their beauty and splendor.
The Sumerians of Mesopotamia and the Babylonians, the Egyptian Kingdoms, the Persian and the Chinese draped themselves with either pearl or mother of pearl jewelry since 3000 BC.
A fragment of the oldest known pearl jewelry, found in the sarcophagus of a Persian princess who died in 520 BC, is displayed in the Louvre Museum in Paris.
In the Americas, both the Incas and Aztecs prized pearls for their beauty and magical powers.
The Romans prized pearls as the ultimate gems and turned pearls into many kinds of decorative accessories. During the classical Roman period, only persons above a certain rank were allowed to wear pearl jewelry.
In the West, most European countries in the thirteenth and fourteenth centuries had laws regarding who could and could not wear pearls. Teachers and lawyers, for example, could not wear fringes or chains with pearls. For quite a long time in history, pearl was a symbol of power and wealth.
Emperor Napoleon Bonaparte and his wife Josephine’s preference to pearls induced a growing demand for this natural gem.
Pearls have been considered ideal wedding gifts because they symbolize purity and innocence. In the Hindu religion, the presentation of an un-drilled pearl and its piercing has become part of the marriage ceremony.
Pearls display the qualities of elegance, purity and perfection.
As such, this natural gem has been taken as symbols for many supreme ideas.
To the ancients, pearls were a symbol of soft powers.
People have also attached different meanings to various colors of pearl.
White pearls have been perceived as the symbol of purity.
Rose and pink pearls symbolize love.
Wealth is symbolized through golden pearls.
Pearls with peacock green color symbolizes romance.
Sapphire blue pearls were taken as the symbol of eternity.
While black pearls symbolize dignity.
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Pearl Wholesale Data: White South Sea Pearl Wholesale Industry and Market Analysis
Now, let’s look at the WHITE South Sea Pearl Wholesale situation: (Pearls farmed in the Pinctada maxima oyster in Australia, Indonesia, the Philippines and Myanmar).
History tends to repeats itself. When an industry is new and successful, it can catch fire. The produce is scarce and prices are high. Understandably, many are jumping on the lucrative bandwagon… till, at one given moment, the saturation point is reached (read over-production). It happened to Japan in 1966/1967, and to Tahiti most recently. And it is happening to the white South Sea Pearl Wholesale as we speak. Tides have turned. (Info details: Pearl Wholesale).
That it coincides with the present global recession makes the problem more pronounced and has a very serious impact on the industry. One can also put it into other words: It was the sudden global recession that finally brought the pot to over-boil. This “double-punch” is now rocking the industry at its foundation, as it has made heavy capital investments during recent years. The interesting history of white South Sea Pearl Wholesale goes way back to the pre-war time, when Japanese pioneers farmed them in Indonesia, and sold them under their sponsor’s name as “Mitsubishi Pearls”. The pre-war peak in production was reached in 1936, with a quantity of 5 kan (18.75 kilos). One must give due credit to those who took up South Sea Pearl Wholesale farming after the war. We refer to Mr. Takashima who ventured into Burma in 1954, and to the legendary Mr. Kuribayashi who introduced the cultured pearl industry to Australia in 1956. But the South Sea Pearl Wholesale only moved into the limelight in the early 1980s. We estimate that by 1982/1983, the global annual production volume had reached 100 kan (375 kilos) for the first time, at an estimated price of yen 60,000 per momme (or US$ 240 at the then prevailing rate of yen 250/dollar). (Info details: Pearl Wholesale)
For 2009, we estimate the global South Sea Pearl Wholesale production to reach 3,350 kan (12.4 tonnes), at an average price of yen 4,870 per momme (or US$ 51 at today’s exchange rate). In terms of weight, this represents a 33-fold increase in the relatively short span of 27 years.
As we speak, the industry is going through major adjustments with the aim to correct the present imbalance between supply and demand, to achieve price-stability and re-gain profitability. A considerable reduction in production could well coincide with the global economy coming out of recession. This will be most welcome news. But it will not happen tomorrow.
We are not in an industry where production units can be shut down almost instantly, as it is happening now, e.g. in the car industry. The lead-time in our industry is a few years. This will be a very crucial time. We’ll witness a major shakeout on all levels. Australia, the leading producer, has the best-regulated pearling and Pearl Wholesale industry, which makes it also the most transparent among all producer nations.
At present, total quota units in WA number 907,000 oysters (557,000 wild stock and 350,000 hatchery options). Total seeding rights this year are set at 962,700 oysters. Gone are the days where these seeding rights were utilised to their full capacity. Gone are the days when a 15,000 quota was practically the equivalent to a “license to print money”. Today, several farms, prosperous just a few years ago, are no longer operating per se. Comes seeding time this July and August, we’ll witness that all the farms in WA, without exception, are seeding less oysters.
We estimate that the total number of oysters seeded will reach 450,000 at most (our lowend estimate is 350,000). This is less than half the allowable quota, and much less than seeded during past years. This is extremely significant, but due to the long lead time, the results will only be felt in a couple of years, at the earliest.
Indonesia’s SSP industry is facing similar/same problems, and for many, it has now become a survival game. But there, the situation is less transparent. One Herculean producer, the Nusantara Pearl Group (known to market through the Concorde Auctions), is estimated to control roughly 70 to 75 percent of total Indonesian production. It is only natural that all eyes are now focusing on them, hoping to get a glimpse of how they react in today’s trying times. (One exception to the rule in Indonesia is Atlas South Sea Pearl. Atlas is extremely well managed and very efficient. The quality of their pearls is correspondingly high and cannot be compared with the Indonesian average. Atlas enjoys a very high reputation in our trade and, being publicly quoted, is the only Indonesian producer to show transparency. They deserve special mention). (Reference: Pearl Wholesale)
We don’t have too much reliable information when it comes to the Philippines but believe that they are no exception. To stay in the game, they too have to restructure. Some farms have openly admitted that their 2009 seedings will be down by 30 to 35 percent. Myanmar lives in the past, and overseas investors who entered pearl farming contracts with the government, are now realising that it is a very lopsided deal in favour of the Burmese who don’t share any risk. These overseas investors acted in good faith, some of them made huge capital investments. For them, it has become almost impossible to keep the head above the water, especially when at least 1/4 of their crops is taken away by the government… well, time will tell.
While writing this speech, I was kind of warned by some very prominent pearl traders,NOT to give a bleak picture, NOT to show certain figures, and NOT to disclose recentprice-developments.While I have partially tried to adhere to this request, I firmly believe that we must not beafraid to confront the reality. I think it is unfair and unethical to hide facts about productionand price-developments, etc. Most of our customers invest, and deserve to know wherethey stand.Confidence is a key-issue. The more open and transparent we are, the more we gaincredibility, which our industry often lacks!Also, we must be aware that in certain countries, misrepresentation to the buyer is againstthe law.(Reference: Pearl Wholesale)
Any industry has teething problems, goes through stages of “trial and error” and often livesin a “world of uncertainty”. As the industry matures, adjustments are made.Look at the American Automobile Industry. When it started just before the turn of the lastcentury, many jumped on the bandwagon. By 1909, there were a total of 557 registered automobile producers in the USA. In the span of a hundred years, there were over 1,000many merged. Today, we are down to just three (all in the process of serious restructuring).But these three are now producing much more cars than the 1,000manufacturers had ever produced together. We observe the same with the airline industry. Today’s fewer airline companies are transporting much more passengers than a much larger number of airline companiestransported twenty or thirty years ago.
Don’t we also observe a similar pattern developing in our small pearling industry? Don’t we have now in Australia a situation where several farms, over time, were put into just two baskets (the Paspaley Group and the Autore Group), whereas previously, they were independently working and marketing? During the past years, the number of pearl farms in Indonesia and Tahiti (and possibly the Philippines) has been reduced. Yet, production volumes have multiplied. Yes, we are presently going through a “restructuring phase”, with mergers and acquisitions and, ultimately, some failures. (Reference: Pearl Wholesale)
No doubt, our industry will not only survive, it will thrive again in the not too distant future. Major re-adjustments will take some time, and for many, it’s a very painful process. But most will come out of this, and blossom! At present, the cake served to overfed and cash-strapped consumers is too large to be digested. But as consumers are developing appetite again, they will suddenly wake up, and be confronted with a much smaller cake, and the race to get a piece of it will start again! Be ready and don’t miss out. It’s the early birds that are catching the worms!
Article source: Andy Müller, Kobe/Japan, as presented at the European Gemmological Symposium in Berne, Switzerland on June 5th, 2009 – South Sea Pearl Wholesale
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Developments in and around TAHITI (French Polynesia) Black Pearls
As we all know, Tahiti runs a monopoly when it comes to “black pearls”. Ever since it started to produce commercial volumes in the late 1970s, it commanded a global market share (in both weight and value) estimated at between 93 to 95 percent. Tahiti may well be the “Herculean producer of the black pearl”, but it is surely not its pioneer.
The first “black pearls” cultivated in the Pinctada margaritifera oyster date back to the 1920s. The Japanese farmed them for decades in their southern Ryukyu Islands, around Okinawa. But since this black-lip oyster species is available throughout the Indo-Pacific region, many pearl farms were established in places such as the Cook Islands, New Caledonia, Fiji, the Marshall Islands, Indonesia, the Philippines, the Ryukyu Islands, as well as in the Pescadores Islands, located in Taiwan’s Formosa Strait.
Many of them are now closed, or are just limping along. The most active ones (besides those around Tahiti) are in the Cook Islands and in Fiji. Especially Fiji’s Justin Hunter is worth watching. Well aware that he can never win a numbers game with Tahiti, he wisely puts quality ahead of quantity. But with due respect to all those, their combined output has, and will never pose, any serious threat to Tahiti. During the 1980s and 1990s, Tahitian pearl production went full throttle. Pearls, after Tourism, became Tahiti’s second largest goose to lay the golden eggs. These were the
happy heydays, when all flags were flying.
Here some highlights:
– 1972 (First recorded export) 1.5kg US$3.663.-
– 1983 139kg US$5.0 million
– 1992 1 tonne US$43.5 million
– 1996 5.1 tonnes US$152.4 million
– 2003 to 2008 (annually) 10 to 15 tonnes US$130 million (*)
(*) 2003 to 2008 are very rough estimates (see reason below), whereas figures for 1972 to 1996 are accurate.
In other words: in 1996, Tahiti got more money from 5 tonnes of pearls, than it is getting today with annual production volumes that have doubled (by certain estimates even tripled). It looks as if Tahiti’s pearl industry is now drowning in its own success.
Sadly, the over-ambitious politicians running the Government of French Polynesia, eager in seeking votes for re-election, had issued farming licenses like Santa Claus throws candies to kids around Christmas time. It is estimated that at its peak time during the late 1990s and early in the 2000s, approximately 1,500 independent pearl farms were operational. During these years, many Tahitians got the “I can do it too” virus in their blood, for which
the only effective antibiotic was to give them a pearl farming license. Some of this happened in the absence of knowledge, ability or capital. But Government and banks were happy to assist. Unfortunately, the Government was too lax to implement control of licenses, leases and quotas.
The situation got out of control, resulting in a huge overproduction, with prices going downhill. After thirty years of enjoying a sellers’ market, Tahiti suddenly woke up, realising that the tides had turned. By 2007, the number of active farms had shrunk to approximately 650. By 2008, estimates run at around 550 (with 50 being medium to large in size, and 500 being small ones). But the decline continues. It is very well possible, that the number will drop to below 350 by the end of this year. Practically every pearl farm still operating in French Polynesia is running dark red figures. This is actually quite amazing! Think of it: There is a country that runs a monopoly, producing beautiful gems that enjoy very high popularity all over the world. Yet, every producer is losing money! Something wrong isn’t it!
As the prices for Tahitian pearls tumbled, the export tax (at 200 CFP/gram) became excessive in relation to the value of the pearls themselves. The result was that in recent years, considerable volumes of pearls were apparently smuggled out of the country (hence, no more accurate statistics). In October 2008, the Government abolished this
export tax. But other export procedures remain in place, including a quality control system by x-ray machine.
By abolishing this export tax (rather than reducing it), the Government strangled the much needed funds used for their very successful promotional campaigns. The “GIE Perles de Tahiti” (Martin Coeroli) had done a good job, over many years, very actively promoting Tahiti’s gems. From 2003 to 2008 alone, between 6 and 9 million US$ dollars were spent annually on worldwide propaganda. But with the export tax totally abolished, and no alternative financial sources available, there is no more money for publicity, and the “GIE Perles de Tahiti” has now died. Came 2008/2009, Tahiti’s second largest industry had not only reached the state of “chaos and disarray”, it had become an embarrassment to its Government, with the world watching in disbelief.
What will the future hold for Tahiti and its pearling industry? Basically, Tahiti has now a couple of choices:
One is that the government maintains its “laissez-faire” attitude, under the motto (or rather the excuse of) “we live in a free country and it’s everybody’s game”. The result will be that the industry is left to open market forces, which actually translates into “elimination by nature”. This would be a painful process for many. But over time, it would normalise the situation.
The second scenario is that the government takes advantage of its monopoly situation, acts swiftly and plays its cards well. Even though living in a “free country”, there is nothing wrong with rules and regulations, with order, control and discipline (look e.g. at the Australian pearling industry). If the Government is now willing to act swiftly by providing funds to support prices of latest crops, by implementing farm control and observing strict discipline, by re-introducing a reasonable export tax (say CFP40/gram, so everybody will pay and smuggling will stop), by re-considering the fees for the “négotiants”, by re-activating the GIE Perles de Tahiti with the resulting funds, by re-activating export customs control, by limiting further expansions of production, etc., then there is hope that Tahiti’s pearl industry will once again become a well respected, trustworthy and prosperous one. It seems the Government is actually thinking of a third scenario, introducing a “pearl centre” or “pearl house”, kind of a “centralised buying and selling organisation”, with a “price-control-system”. Our personal opinion, based on decades long experience, makes us conclude that such system will not work, for reasons we don’t need to elaborate here.
No matter what scenario will develop, the fact remains that many farming operations are in the process of collapsing as we speak. This will result in much lower production volumes, with prices re-bouncing quite drastically in the not-too-distant future. No industry that produces at a cost of 100 and sells at 50 is sustainable. Pearl traders, if you want to buy the dollar at fifty cents, better hurry up!
Article source: Andy Müller, Kobe/Japan, as presented at the European Gemological Symposium in Berne, Switzerland on June 5th, 2009
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