Sri Lanka and Madagascar, two renowned sources of top-quality sapphires, are currently facing challenges that are impacting the availability and prices of these precious gemstones. The ongoing economic crisis in Sri Lanka, combined with the volatility surrounding gemstone exports in Madagascar, has created a tough market for dealers and buyers alike. As the Tucson gem shows draw near, industry players are hustling to secure their supplies of sapphires, but it’s proving to be quite a daunting task.
The Quest for Top-Quality Goods
Finding the finest sapphires has become increasingly difficult due to limited production in Sri Lanka and Madagascar. Allen Kleiman of A. Kleiman & Co., who recently traveled to Sri Lanka to source gemstones for the upcoming GemFair in Tucson, describes it as his toughest trip yet. He laments the scarcity of high-quality merchandise, particularly fine blue sapphires and unheated stones of any size. The market is under immense pressure as everyone competes for the same top-quality gems. John Bachman of a renowned gem firm echoes this sentiment, stating that there simply isn’t enough material to meet the demand. To exacerbate matters, many sapphires mined in Sri Lanka are not making it to the market, as they are being sold off in local auctions, facing stiff competition from Chinese buyers.
Award-Winning blue Sapphire from A. Kleiman & Co.
Price Hikes and Persistent Challenges
Beyond the struggle to find quality stones, industry professionals are grappling with escalating prices. Sheahan Stephens of the eponymous gemstone firm recalls the time when he first introduced teal sapphires to the market back in 2012. At that time, he paid around $100 per carat for them. However, today, he is shelling out more than $350 per carat. This surge in prices has led to a pullback in purchasing green and teal sapphires. The pricing threshold for these hues seems to have reached its peak.
Kleiman, who is grateful for any opportunity to purchase sapphires amidst these challenging times, has observed a 20% increase in sapphire prices. Bachman notes that sourcing blue sapphires in Sri Lanka has become progressively more difficult over the past year, with prices doubling compared to four years ago. This persistent rise in demand prompts him to question the future trajectory of the sapphire market.
Challenges and Consumer Protection
In addition to the scarcity and soaring prices, another issue that continues to plague the industry is the direct-to-consumer trend. Stephens highlights that some traders in source countries are bypassing the traditional supply chain and selling gems directly to consumers. This circumvention of necessary steps, such as testing stones for color stability, poses potential problems for consumers. Peach to pink sapphires from Madagascar, for instance, often fade, leading to concerns for retailers who purchase directly from Sri Lankan or East African merchants looking to avoid dealers who test the material for color stability.
To ensure consumer satisfaction, dealers and retailers must take the appropriate measures to verify and validate the color stability of pink, peach, yellow, padparadscha, and purplish-pink sapphires. Neglecting these steps could result in fading of the gemstones, leading to dissatisfied customers.
A Glimpse of Tucson’s Gem Extravaganza
Despite the challenges faced by the industry, dealers are determined to offer an impressive array of sapphires at the upcoming Tucson shows. Margit Thorndal of Madagascar Imports specializes in showcasing Sapphire melee, stones that are 3 mm and smaller, sourced from Madagascar. These melee sapphires come in a range of enchanting colors, including pinks, purples, and blues. Kleiman, on the other hand, is excited to present his latest prized acquisition: a no-treatment oval Alexandrite from Tanzania. Additionally, Bachman, who has struggled to source traditional blue sapphires, will be showcasing star sapphires from Sri Lanka, along with blue and yellow sapphires from Madagascar. Sara Gems’ Rahmanan will offer a fresh supply of unheated sapphires, as well as a 10-carat pink sapphire and some rubies from Mozambique.
Stephens concludes with a prediction: a market correction is on the horizon, and power centers in the gemstone industry are shifting. While Sri Lanka’s conditions are expected to persist for several years due to political and economic challenges, Madagascar’s output is anticipated to surpass Sri Lanka’s in the coming years. This dynamic shift in the market highlights the need for industry players to adapt to changing circumstances and embrace responsible sourcing practices.
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