By Jennifer Heebner, Editor in Chief
American Pearl dealers are having a lot of difficult conversations with clients this year. Since the beginning of 2023, Akoya shortages, price hikes, and Chinese demand have created a difficult buying scenario for U.S. wholesalers and Pearl jewelry manufacturers. Reports from the June edition of the Hong Kong International Jewellery Show reveal that Yanks can expect more of the same for the foreseeable future.
Japanese Production & Prices
Reduced Japanese Pearl production remains an underlying culprit. “Akoya production in Japan has dropped more than 80% in 30 years,” explains Yuichi Nakamura, Vice Chairman and CEO of PJ Nakamura International. He adds that harvested Japanese Pearls between January and March 2023, based on weight, dropped nearly 10 percent year over year, while their average prices rose 67%.
A weakened yen is offsetting some of these costs for U.S. buyers though not enough to greatly ease the pain. “Prices for Akoyas are 40% higher than last year,” notes Aziz Basalely, Owner of Eliko Pearl, who attended the March and June editions of the show. Japanese Pearlers and other U.S.-based firms think that’s a modest assessment—more like 50% and higher, thanks to the Chinese.
“The unit price that Chinese customers offer is high, and Westerners cannot keep up with that,” says George Otsuki, Owner of Kakuda Pearl.
Pearls in Hong Kong
Traffic in the Japanese Pearl sections of June’s show was robust but less frenzied than the previous fair, which makes sense given March was “the first post-Covid-19 show,” observes Nakamura.
Sales of Japanese Pearls in June seemed strong to Basalely, while traffic in a new Chinese mainland Pearl company section was less busy, ironic considering Chinese buyers’ love of the gem. Basalely chalks up that phenomenon to dissipating Chinese Covid-19 demand.
“Nobody was even looking at that merchandise—and most of it had lab reports,” he maintains.
Quiet aisles and top qualities aside, Basalely wasn’t biting; he couldn’t.
“Prices are way too high for the general American. Prices were two to two and a half times what someone would expect to pay here in store.”
Meanwhile, fine freshwater Pearl prices are up as much as 60% and so are white South Seas. Tahitian Pearl prices are up a minimum of 20%, and even more for fine goods under 9 mm and over 12 mm.
Sourcing Struggles
Firms with buyers at the top end, regardless of cost, say replacing product remains their biggest challenge. According to Peggy Grosz, Senior Vice President of Assael, the prices of fine large Tahitians have increased the most in the last few months, but she and others are still selling. Grosz loves this consumption.
“Luxury jewelry brands have made collections with Pearls like never before to meet worldwide consumer demand,” she says with her loose Pearl division in mind.
Average sizes of Akoya Pearls are also smaller—at least for the time being. This is because of high mortality rates of baby oysters, leaving a reduced supply of larger sizes to graft. Plus, smaller nuclei are being used more often “to reduce the burden to the oysters,” notes Nakamura. “Fewer 8 mm and 9 mm Akoyas are expected for next year.”
In high-quality intense natural colors of Edison (bead nucleated) freshwater Pearls, production is limited, and 13 mm–16 mm strands are hard to find. “Add the purples and metallics and you’ve got extreme rarity,” says Eric Yen of Yen’s Jewelry & Accessories, Inc. Yen is a Partner in the firm.
And while Joshua Israileff, one of the Owners of ASBA USA, has sold out of many Pearl sizes and types this year, he’s found another bright spot in inventory: golden South Seas. “The material we are getting, and the prices, are amazing,” he says.
The Chinese Appetite
Like his peers, Yen faces sourcing difficulties and high prices because of the Chinese market.
“Many Pearls never leave Asia,” he says. “Clean freshwater goods are being sold within China, and farmers and manufacturers don’t want to export,” he says. “Some of them are holding inventory and not even showing in Hong Kong.”
Israileff blames Chinese social media commerce for lack of goods. “Selection is way down since farmers are now selling on WeChat before shows open,” he says.
Otsuki’s Japan-based firm sees Chinese demand firsthand, particularly for white colors, when he exhibits in Hong Kong. “Strong demand in China has led to a notable increase in the price of white Pearls regardless of their mother oyster species,” says Otsuki.
Another new development: Chinese buyers shopping the U.S. shows. “We saw many more at JCK Las Vegas,” Yen adds. “This includes some wholesalers coming over to the U.S. to source and sell back in Asia.”
Bottom Line
Be prepared to spend more on top qualities of every Pearl type. “To replenish inventory at old prices is nearly impossible,” notes Otsuki. TARA Pearl’s Partner Sonny Sethi agrees and offers this advice: “Ask suppliers if they are holding old stock at old prices.”
American retailers selling mid- to gem-quality Pearls will notice the price hikes. Stay in touch with suppliers for pricing updates, as replacement costs change quickly.
Be mindful of quality when shopping, especially if sourcing from a new firm and when prices seem too good to be true. Dealers say some Chinese growers are taking shortcuts by way of lower-quality bead nuclei and thinner nacre to get Pearls to market faster. Another concern: Less-than-credible dealers trying to confuse buyers with Pearls labeled Chinese Akoya. “It’s mostly bead-nucleated freshwaters,” says Yen.
Call in holiday orders sooner than you typically would, as availability is tight, and harvests on the horizon are not looking more abundant. Some of Sethi’s Japanese Pearl dealers tell him their raw costs have risen 75%, and that’s on inventory that’s still in the water. “We won’t know about those prices until fall,” he says.
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