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Pearl prices, supplies adjust with recession

By Catherine Dayrit
October 22, 2009
Breuning Tahitian pearl pendant on loops of white gold accented with 0.138 carats of diamonds (chain sold separately); suggested retail price in 14-karat gold is $1,249. (866) 872-2842 or Breuning.com

Pearl prices fell earlier this year amid poor economic conditions, but experts say both prices and demand are rising as supply adjusts and the category gains fashion fans.

Design Trends: A new generation is eyeing pearls, thanks to the emergence of boldly colored pearls, which began with "chocolate" pearls and moved on to vivid green and blue "peacock" hues, says Kathy Grenier of the Cultured Pearl Association of America (CPAA), also citing sterling silver with pearls and long, versatile strands.

Supply and Demand Issues: While the prized Japanese akoya enjoys greater demand than its Chinese counterpart, supplies of both have suffered. Chinese akoya farms were hit hard by typhoons, including Typhoon Pabuk in 2007, resulting in tremendous losses, says Peter Bazar, vice president of the CPAA and president of Imperial. And while Japanese akoyas continue to be dogged by pollution, the industry is paying attention to Mikimoto, which announced in August that its new successful akoya farming venture in Ainoshima, Japan, heralded a new advance in Japanese pearl production. Production is limited, but if the process is deemed an improvement, it will be adopted, Bazar says.

Interest remains in Tahitian and South Sea pearls, but the volume demand is less, says pearl purveyor Betty Sue King of King's Ransom.

Price Points: While poor demand led farm levels to plummet precipitously over the first half of this year, prices are now rising fast as supply adjusts to the market, says Bazar.

At the entry level, freshwater pearls remain a major option. Pollution and overproduction have led to a proliferation of low-quality freshwaters on the market. Yet high-quality versions, competing in size with akoyas and even South Sea varieties, provide value for those seeking a big look for less, says Sea Hunt Pearl owner Jack Lynch, adding that Tahitian pearl prices decreased earlier this year and that the sector saw a few Tahitian pearl farmers go out of business. With limited supply, both demand and prices for Tahitians are expected to increase.

Marketing: The CPAA has created a new advertising campaign to highlight the main varieties of pearls. The high-end, agency-quality images are free for retailers to use as countertop displays, mailings and other marketing materials. To access the images online, visit CPAA.org.

To see the latest pearl designs from entry level to couture, download Pitch-perfect pearls.
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