Tahitian Trade-Off

Results from six major pearl auctions last year-three by Robert Wan in Hong Kong, and three United Pearl Producers Auctions (UPPA) in Tahiti-show prices on Tahitian goods falling. Of 140,597 pearls up for sale at the September Wan auction, 119,750 were purchased. The average price per pearl was $62.72, down from an average of $79.63 per pearl for the 139,390 purchased at the March auction. UPPA posted $43.34 per pearl in February, $42.88 in June, and $34.56 in October.

Wan, who controls the majority of the Tahitian pearl market, released figures that show the Japanese buyers on top, with six of the top 10 buyers snapping up roughly 70 percent of the goods. Tasaki-Shinju, one of Japan’s pearl leaders, was on top of the pearl pile this past auction and has been second best in two and in the top 10 in five of the last six. Tasaki has 45 retail outlets as well as 16 department store showcases worldwide. For June, UPPA lists Tasaki as the No. 2 buyer of its top 20, with the Japanese taking nine of those 20 spots.

But this past October, at the last auction of the year, purchases by Japanese buyers were down. One explanation is that the Japanese have overstocked, and, with prices dropping, their inventories are high. Andy Muller of Golay Japan offers another reason for the Japanese slowdown: “hand-carried goods”-pearls sent off the islands as “temporary exports.”

“It wasn’t a concerted action by the Japanese to ‘boycott’ the last auction in Tahiti as such,” explains Muller. However, he notes, the large-volume buyers are concerned about hand-carried pearls. “These goods go to small wholesalers and to retailers all over the world, sometimes on consignment and often at very cheap prices,” he says.

According to Muller, two-thirds of all exports from Tahiti go to Japan. The Japanese dealers then export them as finished strands. “Japan acts as the global manufacturing center where companies have traditional know-how for value added,” says Muller.

“The small customers of ours are able to buy the ‘hand-carried’ merchandise, sometimes at prices which are cheaper than the ones we have to pay,” says Muller. In October, Kazuya Okuda of Okuda Pearl Trading in Kobe, and Muller, representing the Japan Black PearlPromotion, petitioned Tahiti President Gaston Flosse to put a halt to the “temporary exportation” of pearls.

Meanwhile, UPPA created smaller auction lots, which made buying easier for smaller local bidders. More tourists are coming to the islands to buy pearls-a good reason for more local buyers to buy at auction. Having more Tahitian pearls in the local wholesale market means the world jewelry trade doesn’t have to wait for the auctions but can come to the islands to try and pick up what they cannot get from the Japanese. It also means that more pearls can be temporary exports. Of the 37 buyers at the October auction, 18 were local, compared with five local buyers at the June sale.

At the wholesale level. For those who have been in the business of buying pearls, Tahitian pearls are still a good buy. But for those who think they can jump in when the industry is booming-and prices are lower-the going can get rough. So says Devin Macnow, executive director of the Cultured Pearl Information Center in New York.

“Tahitian pearl dealers who have been in the business a long time-like Tara, like Mastaloni, like Assael-know how to look at pearls to judge quality and value,” says Macnow. The subtle nuances of luster, blemishes, color, and shape can be invisible to a novice eye. “These newcomers [buy] high, and then realize that they can’t sell [the pearls],” says Macnow. “A lot of outside importers are trying to get a piece of the inside action. The market’s hot now, so pearls are no problem, they think. But what they don’t know is that you have to have a well-trained eye, like the veterans in this business, to evaluate pearls. They come home, and they find that these pearls won’t sell. The jeweler wants something cleaner, something greener.”

As a result, says Macnow, pearls are dumped into the market, which could be another reason prices at the wholesale level are dropping. Macnow points out that for the retail jeweler, sales of Tahitian pearls couldn’t be better: “Jewelers are still enjoying a full keystone mark-up.”

But this doesn’t mean that nice quality pearls are cheap. UPPA notes the five highest average pearl prices topping off at $1,037 each, for a lot purchased by O.P.E.C. of Tahiti. The next expensive is listed at $717 per pearl for a lot purchased by Kaspar of Japan, followed by a $290-per-pearl price going to Giovane of the United States, $284 per pearl paid by Golay Buchel, and $274 per pearl paid by Ever Ever of Taiwan.

2001 auction schedule. Retail jewelers should contact their Tahitian pearl suppliers shortly after the following auction dates, as the best assortments of pearls will be available at these times.

The first of three Tahitian auctions this year will be conducted by the Tahiti Pearl Producers on Feb. 24 and 25. The United Pearl Producers Auction takes place on July 14 and 15, and the Poe Rava Nui Auction caps off the year on Oct. 26 and 27.

There will be three Robert Wan/Tahiti Perles Auctions in Hong Kong in 2001: March 8 and 9, June 20 and 21, and Sept. 23 and 24.

For more information regarding Tahitian Pearls, check out Perles de Tahiti on the Web at www.tahiti-blackpearls.com, and Robert Wan’s Tahiti Perles at www.tahiti-perles.com.