Pearl Peril

September 1998

Gemstones & Pearls:News

Pearl Peril

U.S. retailers start to feel the effects of Japan's oyster deaths

There's irony in the cultured pearl craze that's sweeping the nation: at the same time retail sales are soaring, there suddenly aren't as many pearls to go around. Scientists are still trying to conclude the exact nature of an epidemic that has smothered millions of akoya pearl oysters and slashed production in Japan's pearl culturing areas by 45% since 1996. When the problem surfaced, importers were padded by low sales in Japan and inventory stockpiles. Now, however, supply in the U.S. is starting to suffer.

"We had exceptionally good pearl sales last year; we didn't anticipate sales growth to be 12%," says Devin Macnow, executive director of the Cultured Pearl Information Center, New York City. "Especially for smaller, better-quality pearls, stocks are being depleted."

Consequently, supply shortages are starting to affect retail prices. The New York Timesreported in May that Tiffany & Co. and some independent jewelers had raised prices up to 25% for top-quality cultured pearl strands.

Other jewelers are still anticipating the supply crunch. "I expect to see some higher prices come Christmas or in time for the Tucson gem shows, but right now the supply seems to be OK," says Nathan Ludlum of What On Earth Inc., Columbus, OH. Some dealers have been able to absorb the price increases so far or are still selling off inventory, says Macnow. "At most we're seeing a 10% price increase in medium-quality pearls and a 20%-30% increase in higher qualities," Macnow says. The 4mm to 5mm better-quality cultured pearls are suffering the biggest shortages.

Sink or Swim?
Until scientists diagnose the exact cause of the oyster deaths (a suspected virus), cultivators face the possibility of an even lower harvest this year. So far this year, farmers say not as many oysters are turning the dreaded red that is the virus' mark. The water in Japan's pearl culturing bays has returned to normal after last year's excessively warm temperatures, which many felt agitated the situation.

"If the sea conditions continue, it's possible production could be higher," says Kazuyoshi Watanabe, managing director of the Japan Pearl Exporters' Association in Tokyo. Cultivators are taking special pains with the oysters that have survived, spreading them out to avoid crowding and staying away from areas hardest hit by the mortalities. They also hope baby oysters they started to raise last year will be ready for nucleation in 1999, though it remains to be seen whether the new oysters will remain healthy.

In the immediate future, such measures may not matter. "The number of oysters nucleated this year was smaller than ever," says Watanabe. The problem is exacerbated by the fact U.S. retailers are getting smarter and pickier about cultured pearls. Of the retailers and dealers CPIC interviewed at the JCK International Jewelry Show in Las Vegas this year, 80% said they were looking for better quality.

How are retailers coping? "Here in New York City I've noticed an increased shortage of higher qualities," says John Gravano of John Gravano & Co. in New York. "I've dealt with this problem by carrying fewer strands and increasing my very-high-quality freshwater pearl selection."

– by Stacey King

Copyright © 1998 by Bond Communications.


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