The world's second largest pearl is due to go up for auction in Abu Dhabi this month in front of 400 potential buyers. On April 25 a natural pearl necklace fetched the highest price yet of $7.7 million (Dh26m) at an auction in New York.
On April 8 Dubai Multi Commodities Centre (DMCC) announced it will set up the world's first pearl exchange.
Unrelated or not these events in less a month have started murmurs about the revitalization pf the global pearl market with emphasis on the Gulf region.
Arab collectors have always been at the helm of the world's market for natural pearls. But this is the first time since the world pearl market collapsed in the 1930's the interest has crystallized in formal trade terms.
The pearl exchange which is not envisaged as a stock exchange is only the first step says Ahmed bin Sulayem the Chief Operating Officer of the DCMM.
"Dubai Pearl Exchange (DPE) is not a stock exchange. It is an exclusive platform that allows buyers and sellers to network and engage in dialogue with the objective of transacting business," he said.
"The exchange is set up under the auspices of the Diamonds and Colored Stones Division at DMCC and serves as s platform for pearl trading form across the globe along with auction facilities for pearl traders.
"It acts as a one stop shop for the pearl trade providing grading and auction services as well," Bin Sulayem told Emirates Today.
The jewel in the crown of global pearl trade is certainly China. In 2005 imports from China and Hong Kong were estimated at more than $337 million (Dh1.23bn) out of a total market size of $1.4 billion (Dh5.1bn) according to UN statistics.
"The pearl industry which is valued at $1bn (Dh3.67bn) in rough form has witnessed a significant recovery since 2005," said Bin Sulayem.
"Pearl prices have shown a continuous upward trend despite a 23.6 percent rise in world pearl production which touched 1,552 tonnes in 2005. Pearl are a major ingredient in jewelry with a highly from $50 to $50,000 (Dh183 to Dh183,000) per pearl grain."
The growth in market size is a result of Mikimoto's technique of culturing pearls patended in 1946 the very event that led to the collapse of the wordl's industry by the 1930s.
It was then that the Gulf region once a market leader lost share to the East. "There is no Gulf market now," said Khaled Al Sayegh the Abu Dhabi based trader from A Sayegh Jewelers who says it is his mission to make the region the centre of the pearl trade once more. He is also the man behind the auction of the second largest pearl in the world natural obviously.
DPE will help of course.
"Traditionally, the pearl trade is a physical trade, where traders need to physically examine the goods before buying," Bin Sulayem said.
"It is not ideally designed for futures contracts. Pearls are priced according to grade, colour, lustre, etc. Unlike gold, they are not linked to currency and hence do not witness volatile fluctuations.
"As DPE will be working towards reviving the pearling tradition in the region, it will involve developing educative programmes for the entire value chain of the pearl trade." The Gulf pearl market, once said to responsible for 95 per cent of the national income, is now limited to private buyers who collect the stones with a passion.
"Our family has a history of 563 years in the field. I feel it is in my blood," said Al Sayegh, who claims to do business worth $5 million to $6 million a year (Dh18m to Dh25m) in natural pearls.
"If I hear there are pearls going on sale somewhere, I am there, whether it is Los Angeles, or Manama or Doha - I will go. I go after natural pearls," said the jeweller.
His passion has a history. Between 1830 and 1900, when all pearls were natural and plastic was not even a glimmer on the horizon, Gulf pearl output was worth an average of $1.75m (Dh6.4m) a year, rising to nearly $4m (Dh14.6m) in the first decade of the 20th century, according to the National Bank of Dubai, that set up the first Gulf pearl museum. Al Sayegh estimates that pearl trading continued to flourish until about 1942.
Today, fine quality natural pearls, between 12mm and 15mm, can fetch between $50,000 and $125,000, (Dh183,000 to Dh460,000), according to the Gemmological Institute of America.
Since they are virtually never found in nature, jewellers buy old strands of these pearls, remove the best gems and make new jewellery from them. Matched natural pearls are very rare.Any one natural pearl in a matched set fetches 40 to 60 per cent more than a cultured pearl.
The Bahrain Government has banned cultured pearls from its markets to keep alive the pearling tradition. But diving for them is still limited to hobbyists.
Al Sayegh said: "I believe 60 per cent of the pearls found in the Gulf remain in the region. Families have stocks that they have inherited. If we can revitalise the market, we can coax the people who have stocks of pearls to come out with them. If they are sure they will get a good price..."
Look and feel
"I can look at a pearl and tell you whether it is natural or cultured. The only thing I did not learn from my grandfather was the ability to weigh a pearl on one's tongue," said Khaled Al Sayegh.
"In those days, if traders' eyes became weak they would trust their hands and tongue to access the value of a pearl." But today, an X-ray is necessary. When purchasing a pearl a seller claims is natural, insist on documentation from a reliable gemmology lab.
Dubai Gem Lab offers certification. When a nucleated cultured pearl is X-rayed, it will reveal a different structure to that of a natural pearl. It exhibits a solid centre with or without concentric growth rings.
A natural pearl is solid nacre or 100 per cent pearl.
The price of beauty
Most people looking for natural pearls to buy will work with resourceful jewellers. They meet producers directly, contact private estates and comb auction catalogues.
At a Christie's auction on April 26, a natural pearl necklace that once belonged to a maharajah sold for nearly $7.1 million (Dh26m). The price was more than double the world record price for any piece of natural pearl jewellery, the auctioneers said.
The buyer from Asia bid by telephone for the Baroda Pearls - a two-strand necklace of natural pearls strung with 68 of the finest and largest (gumball-sized) stones that formed part of a seven-row necklace. The previous record was set by Christie's in Geneva in November 2004 at $3.1m (Dh11.3m), for a two-strand natural pearl necklace.
Lustre is usually considered the most important quality of a pearl. This can be appreciated only by seeing the pearls under natural light. Lustre is the inner glow that sets one pearl apart from another, and makes each unique. The basic colour can vary from black to white but the lustre adds a further dimension of tone, with cream, silver and pink among the more common variants.
Shape also varies, from eggshaped to oval to round, but this seems to matter less than the overall effect. Prices for antiques range from about $1,000 (Dh3.67m) (usually for drop earrings) to $15,000 (Dh55,000) or more for particularly impressive South Sea necklaces.
By Kusumlata S
© Emirates Today 2007
