Tahiti vs China

[Caitlin]

In a rather disjointed review of the recent pearl conference in Abu Dabai near the end, was the following quote. I just found it interesting and wondered how correct it is.

Gulf News. Com
Daniele Naveau, Managing Director of the Robert Wan Tahiti Jewellery:

The controversy over natural versus cultured pearls, and the layman's inability to distinguish between them is what motivates Naveau to pursue a standardisation system in which pearls would be graded, certified and valuated.
Genetic modifications
"The challenge with that is that you have China, which is able to produce thousands of pearls at such a fast rate. It usually takes us years to harvest our pearls whereas in China they have somehow been able to make as much 70 pearls from one oyster.
"They have clearly genetically modified the oysters to be able to change the colours and shapes of the pearls as well. And there is no international framework to guide them so they can really keep on doing what they want to do and that is hurting the industry and the culture of pearls," Naveau said.

 

[Josh]

Wait a minute, this isn't Tahiti vs China this is something dumb someone said, far away from home. Sorry Ms. Naveau, this is the internet and there's no hiding.

 

[jshepherd]

Genetic modification? The Chinese have created hybrids, of course. But I do not believe that is genetic modification. There was no genetic modification to change the colors of the pearls - those colors have always been there. Neither was there genetic modification to produce round pearls. This was done by utilizing the H. cumingi instead of the C. plicata, lowering the number of implants, and changing the insertion method by adding a "twist".

I think that statement is nothing more than an attack on the Chinese pearl industry. The Chinese scare every pearl producing segment of the industry. And that is completely understandable. But to disparage the Chinese for "genetic modification" is wrong. Why not disparage the South Sea pearl industry or the akoya industry? They practice selective breeding as well. How else does Atlas produces white South Sea in a region dominated by gold lip?

Adding the comment that the Chinese have been able to "produce 70 pearls with a single oyster" tells me that Naveau is really just blowing smoke and does not have any real knowledge on the Chinese pearl industry.
1. The Chinese rarely culture more than 32 pearls per shell. The average is closer to 24. The number 70 is a gross exaggeration.
2. The words 'freshwater' and 'oyster' do not go together.

 

[Caitlin]

I wonder if the ignorance of the reporter should be factored in? It seems that Danielle's comments had an element of fear in them.

Once people start realizing pearls are rather like wine, there should not be such fear. Each pearl region has its own specialty and of course the Chinese also have the pearl equivalent of mass wine producers.

Now I wonder if the Abu Dabai conference did not have Chinese there? I really wish we could get more information on it.

 

[Caitlin]

Hi Josh

How is that for a provocative title?

As for Daniele's comments on a standardization- let's take the opportunity to comment that Tahiti's governmental arrogance in destroying pearls that do not meet their standards is not helping anyone.

If pearls are found to be substandard, many if not most, can still be sold, they should just be labeled and priced accordingly. I don't believe the Chinese will ever destroy their less perfect pearls- they just go to schlock sellers.

 

[GemGeek]

Once people start realizing pearls are rather like wine, there should not be such fear. Each pearl region has its own specialty and of course the Chinese also have the pearl equivalent of mass wine producers.

Chinese = White Zinfandel? I like your analogy. There should be plenty of room for all the players.

 

[Valeria101]

As for Daniele's comments on a standardization- let's take the opportunity to comment that Tahiti's governmental arrogance in destroying pearls that do not meet their standards is not helping anyone.

I think there is an interesting problem there: after all, Tahitian pearls do sell for an order of magnitude more (average price per harvest) then Chinese pearls and regulation has something to do with that. Not sure if producers can self-regulate and sustain prices when industry fragmentation remains high (which sounds much like the Chinese pearl sector). Obviously, there is no such thing as perfect regulation - it's bound to create wastage, and worse along the way even if rules remain very simple (as they've been, without much differentiation among pearl types etc.).

Now... 'guess each sector just fits the respective economic environment: the huge, unlimited market jungle in China and the small states where the black pearls come from.

Just theory. Works for taxes (and that's where I've got much of my argument from).


What I am quite curious about if anyone else but the local governments admits that the respective regulation limiting putting a lower bound on commercial black pearl quality DID in fact sustain prices. Or was that just one more administrative myth?

 

[Caitlin]

What I am quite curious about if anyone else but the local governments admits that the respective regulation limiting putting a lower bound on commercial black pearl quality DID in fact sustain prices.

I think the Chinese put the lie to the fact that mass production drives prices on the top pearls down. The worst Chinese pearls fetch very little and the best pearls fetch what they are worth. The bad pearls get dyed and sent to the beaders market. Why not the same for poor quality Tahitians. Just call them "commercial" or "hobby" quality.
Throwing away beautiful baroques with a thin side does not make the good baroques worth more- it just means farmers get nothing for all their work, for pearls that don't make the cut. I think those pearls should be available with a lesser rating-
and sell for considerably less. that's my new tune and I'm sticking to it!

Sorry for the bold up there. I don't kow how it happened and I can't undo it.

 

[Josh]

Hi Caitlin,

(gotcha back)

As a farmer I'm not opposed to the export tax as an idea because I think it is effective in establishing a label of quality.

What I do have a huge problem with is that it is a blanket tax on everything, it is sorely outdated and it funds a bunch of political BS that I should have the freedom to not have anything to do with.

Only 35% of our tax goes to promoting our pearls which is aggravating considering that it was originally implemented for that.

As I have said in other posts, tax on keishi per gram is a complete scandal as keishi is nothing but pearl and it often sells for amounts that make it silly to export when the tax has been paid.

Also, should there not be a little flexibility when measuring the thickness of larger pearls?

Imagine yourself as a farmer: You have just produced an 18mm round, A grade pearl, with an insane peacock color and a mirror luster that you can see yourself in. You have a designer interested in it for $10,000.00. It's lower than you want to sell it but she's really nice so you take it to get it x-rayed for a legal exportation. Unfortunately it has .7mm and not .8mm of nacre on the nucleus so it's confiscated to later get ground into pearly dust.

 

[Valeria101]

Only 35% of our tax goes to promoting our pearls which is aggravating considering that it was originally implemented for that.

Ha! They are skinning the sheep, aren't they tax-ers! What else is new...

Good to hear more sides to the story, and there are at least tree in your story!

The worst Chinese pearls fetch very little and the best pearls fetch what they are worth.

Are you a believer in free markets, Caitlin?

I'm not so sure anymore. At least, the ways various types of pearls are produced, sold and regulated seem to have something to do with prices, and perhaps quality. All quite interesting. Most likely quite a bit over my head too That's why it is nice to have this little discussion on this thread!

Maybe the tax-ers have done their job establishing a 'brand' and should back off. But then, one could never expect those small, environmentally fragile islands to rake up production and compete in the lower end and survive. China has enough land and willingness to do whatever it takes to pump up all those pearls. Still.

Obviously, any regulation will leave some demand unfulfilled: for high end Chinese pearls and for low end Tahitians. It's the nature of the beast.

Blessed the bunch (of obscure consultants?)who will get to work out these policy conundrums! The topic (pearls! pearls for crying out loud!) sounds so good, one might as well volunteer. No worries, I'm over and out on this tempting bit.

 

[Caitlin]

Hi JOsh

That is indeed a sad story! a pearl with .7 nacre getting ground to dust! They hardly even grow akoyas with that much nacre!

I am really horrified at the way a good idea (checking pearls and grading them according to nacre thinkness) has turned into fundamentalist interpretation that crushes the good spirits of the farmers......and snatches profits right out of their pocketbooks.

A pearl such as you describe should be checked and the nacre thinckness noted, then sold for what the farmer can get.

You have mentioned the keshi thing a couple of times. I can't see why they would even check keshi. Keshi is keshi and should be sold as such. The tax per gram does drive the price up, but the farmer is not benefitting by that.

It really seems like time to look at the whole concept again. I think it was a lofty idea, to have a gov't grading, but the details have not worked out as well as they could have been and the gov't is demonstrating some kind of rigid attitude that does not truly support the best interests of the people at the ground level of the industry.

 

[Josh]

The auction that just went on down here was a first of it's kind and left buyers and farmers for the most part happy. The price per gram was also at 1,800CFP (21some USD's) which was a dramatic increase from auctions past. It looks as though buyers will have reason to go to Tahiti instead of Hong Kong for their pearls in the future. If this is the case, maybe buyers can put pressure on the Tahitian government to reconsider the tax per gram. It seems that money is the only thing that talks. Sad.

 

[Valeria101]

Auction moving from HK sounds pretty good. Hopefully no one will think to rake up the tax to reward the bean-counters for the achievement.

...maybe buyers can put pressure on the Tahitian government to reconsider the tax per gram.

Do you think the folks with whatever taxation authority are smart enough to operate a more subtle system? Just curious here.

[OK, now, last one!]

 

[Josh]

I don't know. Sure would be nice to hear from the GIE Perles de Tahiti (they are the ones in charge of promoting our pearls) in these discussions. If they take the time to read P-G, they might as well participate.