Colored Stone Market – May/June 2021

Posted on May 1, 2021 by Stuart M. Robertson, GIA GG

As summer approaches here in the United States, the colored stone trade continues to experience some degree of COVID-19 related disruption. Issues are occurring at varying degrees along the entire length of the supply chain. Small scale mining activities in East Africa, which continues to be one of the most significant sources of colored stones today, are not yet fully operational. Dealers in the local markets report that there has been an increase in the number of small trading centers (markets) in Tanzania and Kenya but there are relatively few foreign buyers. International travel is currently allowed with some conditions, but active cases of COVID-19 in the region is still deterring many of foreign buyers from visiting the main markets. (This is not unlike the situation in Brazil, which is also seeing fewer foreign buyers as COVID cases spike.) Each month, more and more production occurs. But it is clear that given the length of time that the pandemic has negatively impacted market participation, especially at the initial stages of the distribution channels, it will likely be one to two years before major wholesale markets see the variety and number of gemstones that were available at trade fairs immediately before the pandemic. In the U.S., dealers are reporting a decent appetite for finer gems at both the dealer to dealer and dealer to retailer markets. However, sourcing finer quality stones is becoming considerably more challenging as a result of the still active pandemic. Roland Schuessel of Pillar & Stone recently noted, “It is very difficult to get certain stones in the U.S. now unless you have a long-term relationship with your supplier.” Overseas dealers are not sending anything to the US unless the relationship is rock solid. Costs of international shipping, length of transit-time and increased costs of processing imports are high now and is directly affecting the price of gems. “The logistical work related to bringing stones in and out is much higher today and yet they must be paid.” These costs are unlikely to recede even once reopening expands and travel and transportation access broadens. FIGURE 1FIGURE 2FIGURE 3 FIGURE 1. The one gem that is difficult to source outside Myanmar is jadeite.FIGURE 2. Bright gems are in vogue. Mahenge spinel.FIGURE 3. Gemmy yellow sapphireImages courtesy of Pillar & Stone Many of the dealers I’ve spoken with stated that from last August through the current time, business has been very good. However, most expect that as the market opens demand will shift from luxury to travel and leisure related spending. The gem and jewelry sector will see some slow- down as a result. Nevertheless, dealers are still optimistic that business will be up for the year. Considering that a shortage of finer quality stones has been forming for several months, current price levels are expected to be resilient into next year. Similar price patterns have occurred during previous periods in history, and attracted buyers motivated by the potential for gemstones and precious metals as vehicles for wealth preservation. IN THE MARKET The political situation in Myanmar (Burma) has brought fairly strong reaction from the Biden administration, which is again looking to choke off financial support of the military junta through prohibitions on the purchase of products including gems and jadeite. The action is in response to the military’s removal of the democratically elected civilian leader Aung San Suu Kyi on rather unconvincing charges. However, unlike the sanctions imposed towards the end of the Bush administration in 2008, this round of U.S. sanctions appears to penetrate much deeper in the Burmese gem trade. By including the official selling offices and emporiums, they essentially banned American dealers from purchasing Burmese gems. This round of sanctions appears to have few loopholes, at least at a quick glance. As currently written, the new sanctions will have a significant impact on the legal importation into the USA of any gems sourced from Burma. This is likely a situation that is going to influence conditions in the western gem markets...

GemWorld articles are accessible by GemGuide members only. To access our archive of articles and get many other great features and benefits, become a member now!

Become a member