ALL TIME HIGHS ?Thoughts On The Global Gem Markets In Q3 and Q4 2021With vaccination in the USA and Europe arguably hitting ‘herd immunity’, it is easy to think that COVID is just about starting to be over, and normal services will resume shortly.
However, for the colored gemstone industry, the supply and replacement side of the business is not going smoothly, and COVID is creating severe complications in Africa’s rough gemstone industry and also in global manufacturing and sales hubs.
Globally, many jewelry brands and companies have made record sales during COVID in 2020 and 2021. The wealth gains and savings made by the global withering of the leisure and holiday industries has rewired consumer spending habits to the benefit of the jewelry and colored gemstone industries — demand for colored gems is high.
However, in Thailand, a key global colored gemstone hub, the industry is currently in a state of COVID-related paralysis. The JTC and Silom Gem District are not operating properly with gem offices and showrooms closed due to governmental regulation, fear and a severe slow down of buying traffic.
The gem manufacturing city of Chanthaburi, industry has been crippled. On top of a year or more of difficult trading, the sizable African trading community suffered more than 50% Covid positive cases within their community alone — all of which resulted in state quarantine. The Thai owned gem manufacturers whom buy their wares closed due to fear and prevention management.
As we move into July and August, the COVID situation in Thailand is likely to get worse before it gets better. Further afield in other key gem industry centers, Madagascar, East Africa, Peshawar and Jaipur all have had their gem industries disrupted. Burma, faces the twin calamity of COVID and a disastrous military coup that has left their gem industry in tatters. Leading gemstone trade shows in Asia have been cancelled for over a year, Gemfields’ Singapore rough-ruby auctions have been cancelled for a year, and disruptions to travel continue.
The result is emerging shortages in Bangkok’s, Chanthaburi’s and Asia’s polished gem scene.
For anybody reading this in the USA or Europe, none of this may seem relevant, or they may argue there is deep enough global stocks to smooth this glitch. Maybe. However, it is also a fact that seasoned gem dealers, while mindful of the dollar price they paid for an item, will place a higher weight on replacement value — and replacing stock is going to be difficult and costly.
Increased demand and scarcity of fine stock is about to meet each other head-on in August, September and October — key months for global jewelry manufacturers as they prepare themselves for the Xmas holidays season. Gem dealers and jewelers should consider and prepare themselves for the possibility that prices for fine gemstones, and prices realized by prestigious auction houses are likely to be extremely high this 2021/22 season.