STATE
OF THE GEM INDUSTRY (August 2008). Like many
other industries, the gem-jewelry industry is going down hill
worldwide. It may have reached the rock bottom, I am not sure.
Credit is very tight, customers do not pay their bills, many
exhibitors at the gem fairs could not made expenses, while
gems at the source are getting expensive to acquire, process
and sell. Gem trading in Bangkok and elsewhere is decreased,
while fine gems are scarce and very expensive targeting the
wealthy consumer. The current trend is that dealers want to
make money on someone's efforts. Common story: Get consignment
items (cost nothing, no inventory) and if sold, use the money
to pay bills and let the owner of the gem waiting until a
better day comes. At this time, I can say that the gem industry
is comprising of three types of dealers:
Type
1. Gem dealers who carry exceptional fine and
untreated gems, targeting a small percentage of the
consumer who understand and willing to pay the high price.
These gems are kept by the gem dealers and are not always
shown to prospective customer.
Type 2. Gem dealers who carry the mediocre
quality treated gems targeting the general consumer.
These dealers experience the most difficulty in selling their
products as the competition of fierce and the market is saturated
of these type of gems. These dealers suffer the most in the
current economic situation.
Type 3. Gem dealers who carry mostly junk
quality treated gems where everything goes, ideal
for the Chinese and Indian consumers. All kind of tricks and
misinterpretations are used to allure suckers to buy these
stones, especially in the eBay and GemTV channels.
MY
ADVISE TO NEWCOMERS IN THIS INDUSTRY: After
33 years in the gem business I can say that gems is a wonderful
hobby and it should be kept as such. It is an illusion like
other items in life. My advise to naive novices wishing to
pursue a professional career in the gem business: Do not have
the illusion of making fabulous profits in this industry.
Do not listen to sleek marketing advetorials by anyone implying
bright careers in gem industry. These days are over and will
not return. There are no real opportunities in this industry.
There are better things to do in life...
BANNING
BURMESE GEMS.
Late July 2008, US President G. Bush signed the legislation
making illegal the importation of rubies and jadeite from
Burma (Myanmar) into the USA -including rubies and jadeite
processed in third-party countries, like Thailand, India and
China. Read more.
Here is my thoughts:
1. The banning of these gems affects more than 500,000 Burmese
families who earn their living from gem mining and trading.
The Burmese military government cannot support them. These
families have to find another way to make living (i.e. growing
opium) or will continue to work as long as the gems are sold
somewhere, except in USA. If the Burmese opium production
increases, more heroine will be available in the USA -world's
largest opium consumer country.
2. Ruby production from non-Burmese mines (Tanzania, Tajikistan,
Vietnam, Madagascar, etc.) accounts less than 15% of the available
ruby in the market and cannot support the needs the world's
consumption. I predict Burmese rubies and jadeite will continue
to flow into the USA in various ways regardless the banning.
Fine Mogok rubies will be always available for sale in the
USA. It is like the illegal drugs readily available anywhere
in the USA.
3. I predict a new bread of certification process of Burmese
ruby & jadeite will be born stating the gems to be imported
into the USA are not of Burmese origin. Or saying that these
Burmese gems were imported into the USA prior to the ban.
Or some other excuse. The certification will probably be similar
to "Kimberley
process" where rough diamonds are certified as "conflict-free",
ensuring that diamond trading does involve rebel movements
to fund wars against legitimate governments (Angola, Cote
d'Ivoire, Democratic Rep. of Congo and Sierra Leone). In my
opinion the Kimberley process serves only the politics involved,
not the reality of the situation where "blood diamonds"
find their way into the US market.
4. Banning Burmese rubies and jadeite will affect the Thai
industry were more than 1,200 kilos per month of Mong-Hsu
rubies are heat treated and mostly cut in Thailand. New markets
will be created, primarily India and China. Thailand will
lose some of its lucrative ruby business.
Thai jewelry manufacturing will be seriously affected, where
Burmese rubies should be set to jewelry for exportation to
USA.
5. The banning of Burmese ruby-jadeite will affect other sectors
of the economy. More of my thoughts on next issue.
ABREAST
THE THAI GEM MARKET.
Most Thai companies are suffering from low sales affecting
their inventories, operation and general survival, struggling
to stay afloat. Few gem treaters and gem cutting factories
went out of business, while others feel the pinch of the bad
economy. Truly fine gem trading is thriving, everything else
sucks. With few exceptions, most exhibitors at the international
gem & jewelry trade shows lost money. Motto of our times:
You must have for sale fine and untreated gems to survive.
MOGOK
IS STILL CLOSE TO FOREIGNERS. Mogok, the birthplace
of fine gems is still closed to foreigners. It appears that
is not going to be reopened for long time. Local business
in Mogok is sluggish, the effect of the bad economy in Myanmar,
like elsewhere in the world. Plus the recent catastrophic
typhoon in Lower Burma has worsen the situation. The few fine
quality gems are very expensive and there is a complete absence
of Western buyers in the local market. Some shops at Bokyoke
market in Yangon are opening couple days a week. Gasoline
prices are $7 per gallon for 65-octane Chinese petrol. US
dollar is traded at 1,120 kyats (local Burmese paper note).
BUYING
GEMS IN CHANTHABURI, THAILAND. Local and foreign
gem buyers have been taken to the cleaners buying surface
diffusion treated tanzanite and other gems and paying rock-bottom
basement prices. After all, you get what you are paying for.
Lithium-treated zircons are available but in limited quantities
and from very specific sources.
BUYING
FINE GEMSTONES. Most fine-quality gemstones
have disappeared from the Thai market. The very few fine gems
available, are 100%+ more expensive that they were few months
ago. However, low-to-medium quality gems are still available
in large quantities.
NEW
GEM TREATMENT FURNACE. I am fabricating a new type
of furnace using special microwave frequency at mid-temp,
(SP-MT) technology for the treatment of various types of gems.
ANDESINE
TREATMENT. I confirm that the red andesine
sold as "natural"in eBay, television channels and
in the open market, is actually treated in multi step treatments
process. Dealers who are selling these red andesines with
deceptive methods without disclosure should be prosecuted.
PARAIBA
TOURMALINE. The only tourmaline that process
the characteristic "electric neon" blue/greenish
color is emanating only from the Paraiba location in Brazil
and it is treated. Similar appearing tourmalines mined in
Mozambique and Nigeria should NOT be sold as under the name
"Paraiba". David Sherman filed a $120 million lawsuit
April 7 in Superior Court of the State of California, Santa
Cruz, against the American Gem Trade Association; the Gemological
Institute of America and others claiming that they have taken
the locality origin classification "Paraíba tourmaline"
and redefined it as "a color variety classification,
paraiba tourmaline," for similar appearing gems from
Mozambique and Nigeria. more |
