Reactions mixed on U.S. Burmese ruby ban

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Reactions mixed on U.S. Burmese ruby ban

August 08, 2008

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Mumbai, India—The recent U.S. ban on rubies and jadeite from Myanmar (formerly Burma), including stones that were processed in third-party countries, will impact ruby exporters in Thailand, but the extent of the impact is debatable given the perilous state of the U.S. economy.

On Friday in the Thai Pavilion at the India International Jewellery Show, Somchai Phornchindarak, chief executive officer of the Bangkok Gems and Jewelry Fair and vice president of the Thai Gem and Jewelry Traders Association, said the U.S. ban on the importation of Burmese rubies is a "big problem."

He said the bulk of the rubies imported into Thailand for cutting, polishing and exporting to markets around the world are of Burmese origin, and that their biggest market is the United States.

He said his organization has already had meetings on the subject to find a way to mitigate the situation, but to no avail.

"We still do not have any solution," he said.

However, traders among the 36 booths in the Thai Pavilion seemed unfazed by the ban, and said they had already turned to new markets due to the ailing U.S. economy.

The ban on rubies and jadeite from Myanmar, signed into law by President Bush in late July, is designed to diminish a funding source for Myanmar's ruling military junta, which profits from state-run gemstone auctions but has a long history of human rights violations.

The act includes an import ban on gemstones that were mined in Myanmar and were processed or otherwise underwent "substantial transformation," such as treatments, in third-party countries such as Thailand. This extra restriction closes a U.S. Customs loophole that was allowing the Myanmar-originating stones into this country, despite the fact that federal law has banned them since 2003.

Sashithorn Assarasakorn, marketing manager for Thai Trading Stone Co. Ltd., said exports to the U.S. market for her company total about 20 percent, down from 30 percent to 40 percent a few years ago.

Because of the ban, she said her company will now ship African rubies to the United States.

Only time will tell if the U.S. consumer accepts rubies with a lower color quality.

Assarasakorn said it will be up to U.S. retail jewelers to explain to their customers why there are now different stones in the display cases.

"I don't know if the market will accept that or not," she said.

Salil Shah, managing director of Diamrusa Ltd., said exports to the United States for his company now hover around 10 percent to 11 percent, down from 40 percent a few years ago.

Though he acknowledges the ban will impact his business somewhat, he said he already had begun to shift focus to Asia and Europe.

"It was done for a purpose," Shah said of the ban. "Let's hope it serves the purpose."

Even dealers who export a great percentage of the stones to the United States, such as Mehul Patel, of New Suren R.O.P. and Suraj Gems Co. Ltd., did not seem flustered by the ban.

"We have to carry on the business and, anyway, the market in the U.S. is down," he said.

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