By Sze Man Young
Translated by Elmo Wong
Auctions in Hong Kong and Tahiti reveal steady demand for good-quality pearls, with auction organisers reporting competitive bids and solid sales.
The pearl market is undergoing a sea of change. Due to encouraging growth from China, strong demand for South Sea pearls and a slowdown in Tahitian pearl production, Hong Kong has cemented its position as a leading trading and distribution centre for pearls. In the city, pearl auctions are often scheduled alongside major international jewellery trade fairs. In recent years, the number of pearl auctions in Hong Kong has risen significantly, with the city sometimes hosting seven auctions in the same period of time.
Rio Pearl’s auction in Hong Kong last September offered a total of 530 lots of Myanmar South Sea pearls and Tahitian pearls. The sale featured 262 lots or 57,762 pieces of South Sea pearls and 268 lots or 149,307 pieces of Tahitian pearls. The pearl specialist was satisfied with the auction results, raking in US$5.78 million in total sales, with all lots being sold.
“Bids were higher and there were more competitive bids compared to our mid-year auction. This indicates that pearls are moving well in the market; buyers therefore have to increase their inventory to meet the demand,” remarked Jonathan Cheng, director of Rio Pearl. The auction attracted more international buyers as it was held during the September Hong Kong Jewellery & Gem Fair. There were also more pearl companies from Japan in attendance. “The second half of the year is the golden period of the jewellery industry; it is also the best time to replenish inventory,” noted Cheng.
Thanks to current economic conditions and the popularity of online shopping, the market presently favours competitively priced jewellery, resulting in steady demand for small-sized pearls. Cheng pointed out that smaller Tahitian and golden South Sea pearls have been the best sellers at auctions in recent years. “While pearl farms in both Tahiti and Myanmar can constantly produce large-sized pearls, small-sized pearls of 8mm to 10mm are in short supply. Small-sized yet high-quality South Sea and Tahitian pearls are the most sought after among buyers, particularly from Asian markets,” he said.
Prices of Tahitian pearls have been stable, especially for round, smooth and shiny pearls in black and peacock hues. As for lower-quality button and irregularly shaped pearls, prices have been relatively weak. In early 2016, the Tahitian government abolished the inspection of Tahitian pearls for export, which had previously ensured that all exported pearls had a nacre thickness of at least 0.8mm. Given the change in regulation, more pearls that fail to meet the previous thickness requirement are expected to reach the international market, further dragging down the price of lower-quality pearls. This makes purchasing good-quality Tahitian pearls from reputable pearl traders extremely crucial.
In late July last year, the 19th Rikitea Auction in Tahiti exceeded total pre-sale estimates by 26 percent. Auction organiser Dominique Devaux said the positive business sentiment for pearls at jewellery fairs in Hong Kong and Kobe helped boost total sales. Compared to auctions held in the same period in 2016, the average price of pearls sold increased by around 10 percent. “It is difficult to find smooth and shiny pearls of high quality in the market. I believe the prices of these Tahitian pearls will rise even further,” he said. Less than 2 percent of the pearls offered at the auction were unsold.
Looking at the first three quarters of 2017, pearl prices were stable and the market remained keen on good-quality pearls. The number of pearl farms producing high-quality pearls is however limited, and pearl production faces several uncertainties this year. The industry’s response to the fall in production of Tahitian pearls and the high prices of South Sea pearls is expected to be a major issue in the pearl market this year.
"Small-sized yet high-quality South Sea and Tahitian pearls are the most sought after among buyers, particularly from Asian markets."