Emerald markets in motion

Emeralds, like many other gems, suffered from a decline of demand during the economic crisis which was sparked in October 2008. Now there is mounting evidence that the turnaround is close at hand.

London-listed Gemfields, operator and owner of Zambia's Kagem emerald mine and one of the world's largest suppliers of emerald rough, recorded a maiden profit of 2.58 million US dollars for the 2010 financial year, compared with a loss of more than 200 million dollars in 2009.

One reason surely is the recovery of the economy. Another is to be found in the company's business strategy. Gemfields, which markets its goods through auctions held in London, Johannesburg and, as of late, Jaipur, could afford to hold back their rough during the worst months of the crisis and build up substantial stock instead.

The first auction was held in July 2009 in London. In 27 lots a total of 1.39 million carats were offered. 26 lots were sold, the majority to Indian traders, totalling 5.9 million dollars.

Until the end of the financial year 2009 two more auctions were held. According to the company sales of all three auctions together totalled 18.7 million dollars.

December 2010 saw the most successful auction so far. Held in Johannesburg it was attended by 32 buyers from Israel, India, Germany and the USA and generated sales of 19.6 million dollars, surpassing the total sales of all three previous auctions combined. The tender consisted of unusually high grade rough and once again Indians were the biggest buyers.

Probably for this reason the latest auction to date was staged in Jaipur in February 2011. Exact figures have not yet been published but apparently the tender comprised rather low grade rough only, which, as our man in Jaipur tells us, caused some anger and irritation amongst Indian emerald traders.

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Be that as it may, we are pleased that our buyer in Jaipur could secure a rather large parcel of truly fine quality emeralds – from the Johannesburg auction! – for us. They come directly from the cutter and as always, when fighting for high end gems, negotiations were hard and lasted for several weeks. Finally the parcel has safely arrived in our vaults and after running all emeralds through our in-house lab we have started to offer them in our web shop.