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Innovative sectors to invest in: Pearl Jewelry

market research of the pearl industry

In your quest to make profitable new investments, 1 thing is necessary: create new value-added

Market research suggests that in 2019, the global pearl jewellery market was estimated to be around USD 15 Billion growing at 13% a year to reach USD 20 Billion in 2025. During the same year, the international trade in raw pearls was measured at USD 903 Million. Therefore, moving-up-the-chain multiplied the value of the original raw product by 16.5 times. _________________________________________________________________

Market research

pearl market research

The skin of a pearl is the main characteristic that sets it apart from other gemstones. Grading a pearl uses specific criteria that are:

  • Body colour
  • Overtone
  • Lustre
  • Nacre thickness
  • Simpatico
  • Symmetry
  • Size
  • Texture

The making of a pearl

Pearls come in two types: cultured and natural. In both cases, the production way is the same: a tiny marine animal makes its way inside the oyster, or a round shell implant is inserted by a person into the soft tissue of a mollusc. In saltwater, the oyster (a clam, in freshwater) starts to secrete a chemical compound called nacre, which is calcium carbonate composed of conchiolin (similar to a glue made of calcium) that binds together many layers of aragonite crystals. The pearl’s final colour will be the same as the molluscs’ lips in which it was made. Natural pearls are almost made from 100% nacre while in cultured ones, an implant (a bead, or spherical part of a shell) constitutes almost 90% of the mass of the thickness of the pearl (where nacre doesn’t usually exceed 2mm in thickness).

Types of pearls

Different types of univalve and bivalve mollusc live in freshwater and seawater respectively produce natural pearls. (oysters and clams) both bivalve molluscs produce nacre while conchs and snails (univalve molluscs) secrete nacre that has porcelain-like lustre.

Source markets

Natural pearls are fished from bahrain, mexico, the south pacific, and the philippines mainly. Trade in high-end pearls is almost restricted to old stocks that were sourced many centuries ago.

Environmental conditions

Natural pearls need specific environmental conditions to grow:

  • Shallow waters that provide adequate supply of daylight to the oyster beds,
  • Good salinity,
  • Enough parasites for the oysters to ingest,
  • A suitable water temperature to encourage oysters to reproduce,
  • Stable weather conditions (no typhoons or rough oceans),
  • Little to no predators (i.e. Octopuses).

There is an informal guideline that prevents pearl divers from harvesting pearl molluscs that are less than three fingers wide.

Pricing formula: tavernier’s law

  1. Establish a base price that is the price of a one-carat pearl,
  2. Square the weight of the given pearl and then multiply the product times the base rate.
  3. The base rate increases by a third for pearls whose weight goes over 11 carats (44 grains) or 11.5 mm.

NB

  • A grain is one-twentieth of a gram.
  • A 4-grain pearl (1 carat) is approximatively 5.23 mm in diameter. A 1-grain pearl is 3.32 mm.

Natural pearls are in a league of their own as compared to cultured ones. To better illustrate the point, a 5 mm spherical wild pearl will most probably cost 2100% more than the equivalent cultured pearl (such as an akoya pearl). Following the same reasoning, a 9 mm wild pearl may cost 1000% more than a cultured counterpart.

Market size and prices

According to our market research; in 2019, the global pearl jewellery market was estimated to have a value of USD15 billion growing at the rate of 13% a year to reach USD 20 billion in 2025.

How much are pearls worth?

Pearl type Cultured Wild
Frequency of occurrence 50 – 60 times per 100 oysters1 time per 10,000 – 15,000 oysters
Average price (USD)*300 – 1,500 per pearl200 – 700 per carat
Average price per strand (USD)Smaller-sized pearls100 – 10,000
Notes Mostly freshwater varieties – Akoya and south sea pearls (white and gold)
Large-size pearls (USD) 100,000  
NotesVery large south sea pearls (white and gold)
Tahitian pearls (USD)500 – 25,000
NotesExotic with dark colors; come in a variety of qualities and sizes and stunning colours
Akoya pearls (USD)300 – 10,000
NotesSmallest-size classic and round white peals farmed in seawater mollusc farms
Freshwater pearls (USD)50 – 2,000
NotesLook like Akoya pearls but are less expensive. They are farmed in freshwater mussels

*indicative prices only

International trade and market research

Year 2019
World trade (USD million)903
Top exporter (USD Million)287; Japan
Top importer (USD Million)366; Hong Kong
Top net exporter (USD Million)116; Australia
Top next importer (USD Million)320; Hong Kong
Pearls cultured worked, not mounted or set (USD Million)466
Pearls cultured unworked (USD Million)358
Pearls natural, not permanently mounted or set (USD Million)79

Productivity: Implanted oysters (1st Generation)

  • The cycle of harvesting a single pearl may need 6 years (starting from spawning a tiny larvae to a full-grown oyster that produces a pearl).
  • Oysters need to be aged between 2 to 3 years before they can be implanted with a bead or a shell,
  • Another 1 to 2 years are needed before an oyster is ready to be harvested,
  • Finally, another full year may pass for the farmer, the trader and the designer to sort, grade, set and sell a ready-for-sale pearl.
Year 1 Percentage
Survival rate of oysters76%
Morbidity rate of oysters24%
Total100%
Year 2Percentage
Rejection rate (oysters that reject the nuclei)28%
Success rate (oysters that produce pearls)28%
Morbidity rate44%
Total100%

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Bibliography

OEC World

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