Coloured Gemstones Buoyed By Rising DemandHaving ridden out the worst of the global economic crisis surprisingly well, coloured gemstones, especially the ‘big three’, are currently enjoying a spurt in demand, especially from emerging markets around the world. Shanoo Bijlani, Regan Luis and Kamakshi Vyas-Fernandes report on the global prospects today for the big three as well as a range of other coloured gemstones.

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T he so-called big three gemstones – emerald, ruby and sapphire – did surprisingly well in the consumer marketplace despite last year’s economic downturn. “Their prices have appreciated by nearly 20 per cent over the last two years,” says Dharmendra Tank, proprietor of Heeralal Chhaganlal Tank, Jaipur. Large stones in particular have shown a remarkable appreciation in value, according to him. “The price of a 10-carat ruby has doubled in the last two years, a sapphire of the same size would have appreciated 50 per cent in value while that of a Sri Lankan Sapphire has risen by 35 per cent,” he says.

Emerald prices remained flat over the past few years, but have seen a definite price increase over the last six months. Vijay Chordia of Valentine Jewellery remarks, “Emerald prices didn’t go too low over the last two years, and they have now risen. Sapphires and rubies too are now scaling up by between 10- and 20 per cent.”

Dealers note, however, that there have been reversals in specific categories, especially treated stones. Burmese ruby prices have taken a hit due to two main reasons – the US trade

embargo on them, and the amount of undisclosed treatment that these stones are subjected to. Nirmal Kumar Bardiya of RMC Jewels, Jaipur, points out the different directions the prices of treated and untreated stones have taken, “Prices of glass-filled rubies have fallen between 40- and 50 per cent, but prices of untreated rubies have risen by between 30- and 40 per cent.” In general, Bardiya adds, the value of emeralds and sapphires has appreciated by about 30 per cent globally.”

Anna Haber, Gemfields’ director of global marketing says, “America is the biggest market for emeralds, but television channels dedicated to selling jewellery were not using them due to undisclosed treatment of stones. This put consumers off for a long time. Gemfields has been talking to a few channels now and they have accepted oil as a natural treatment. Gemfields ensures that it does not treat rough emeralds and we are also working with dealers to ensure that this policy continues downstream. Treatments are often used in Colombian and Brazilian emeralds because of the nature of the stones and their formation; Zambian emeralds are a lot cleaner by nature.”

Lalit Kasliwal of Dusad Gems notes,

The price of a 10-carat ruby has doubled in the last two years, a sapphire of the same size would have appreciated 50 per cent in value while that of a Sri Lankan Sapphire has risen by 35 per cent.

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rough diamond industry, so that is why emeralds never took a big hit from the global financial crisis. There were probems, on the mining side though, as the cost of production shot up due to the record high oil prices, which at one point touched $150 a barrel,” states Gemfields regional marketing director for Asia, Rupak Sen.

According to Sen, Colombia accounts for between 50- and 60 per cent in terms of overall market value, Zambia has about 30 per cent and Brazil and the other places make up the rest. Sen says Gemfields accounts for between 50- and 60 per cent of Zambian production, which means it produces between 15- and 20 per cent of the world’s emerald output.

“Zambian emerald production has been consistent; the Colombian production has gone down over the

however, that demand for treated stones still remains good. “There is a good demand for glass-filled rubies as they are an affordable substitute for untreated rubies and they are available in all sizes and cuts and carats. Consumers who cannot afford to buy a 20 ct ruby will happily settle for glass-filled ones.”

Emeralds Hold Up Despite tough times

Globally, emeralds at the retail level were affected by the financial crisis as prices stayed stagnant; however, the mines also started to produce less during that time. “The overall emerald market is just $200 million to $250 million in terms of rough, which is about 2 per cent of the $12 billion

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last one year for reasons unknown. We personally feel that 2010 is going to be a great year for emeralds. Our dealers have told us that after the last three emerald auctions, they have much more confidence in investing in their emerald businesses because now they have somebody who can supply them with consistent quality and colour throughout the year,” he adds.

Chordia agrees. “Retailers are confident as manufacturers are once again buying gemstones and that has been amply reflected at the three auctions held by Gemfields.” Since July 2009, Gemfields has held three rough emerald auctions that collectively achieved a total of about $18.7 million (or $0.74 per carat) for around 25.24 million carats.

Haber of Gemfields, giving an indication of which markets are buoying up emerald prices, notes, “Seventy per cent of whatever Gemfields produces in the mines is sold

as cut and polished goods in India and the Middle East.”

other HuesWhile the big three are undoubtedly

enjoying a great run in the Indian consumer market, dealers note that several other stones like tourmaline, tanzanite and tsavorite are beginning to also gain popularity. Much of this popularity is due to their ability to substitute for the more expensive stones. Tank says, “The local consumer is likely to buy red tourmalines as they can be good substitutes for rubies.” Pointing to a role reversal, however, he notes that blue sapphires make a great substitute for expensive tanzanite.

In India, however, blue sapphires sometimes have issues other than colour and beauty to overcome. Chordia notes, “Sapphires in India are still bought with trepidation because of their astrological repercussions and therefore buyers are looking for

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Tanzanite prices had dipped during the economic downturn by between 20- and 30 per cent for large stones.

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alternatives and picking up tanzanite, kynite and other options in blue.”

Tanzanite is one stone that has seen a price reversal. Chordia says, “Tanzanite prices had dipped during the economic downturn by between 20- and 30 per cent for large stones. But, he adds, prices are now trending upward again although they are still 10- to 15 per cent below 2008 levels.” Increasing rough prices are likely to keep tanzanite prices moving north, Chordia notes.

Global Scene America has traditionally been

the biggest consumer of coloured gemstones, but that market is still depressed today., China on the other hand, is emerging as a strong market with demand for good quality stones in green and pink hues. But the biggest in coloured gemstone consumption is in India, according to Chordia. Medium to large emeralds in particular have shown strong growth he says. Chordia also points to one other market. “The Middle East held its own even during

the recession. The region has always been a strong market for emeralds and rubies and less so for sapphires.”

Internationally there is also a great demand for green tourmaline, blue topaz and all hues of quartz crystals.

Gemstone LayoutsTraditionally, gemstones had a

limited role as centrepieces in jewellery, but are now being liberally used in different layouts in necklaces, rings and bracelets. Most cuts do well, but cushion- and pear cuts are extremely popular because they look bigger. Consumers also go for ovals, octagons and checker board cuts.

Haber explains the economic feasibility of the role coloured stones especially when they are used as centrepieces where diamonds surround a large emerald or ruby. “We are seeing diamonds becoming accents to emeralds or other gemstones as opposed to the other way round. Also from a price point of view, if you have a 10 carat diamond as a centrepiece, the item is going to be worth a few million

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Emeralds weighing 3 carats and above, priced between Rs.4,000 and Rs.6,000 per carat, are in strong demand for the astrological market.

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dollars. Whereas if you put a 10 carat emerald as a centrepiece, it adds a lot of glamour and the price point will still remain within budget.”

Coloured gemstones are used equally in formal and casual jewellery because there is a market for both. “Every time I walk down London’s Bond Street, I’m always amazed that every single jeweller right from some of the more traditional ones like Tiffany, Graff, Asprey, Adler and David Morris to the more funky and avant garde jewellers like Moussaieff and Cartier all have amazing emerald jewellery in their window,” Haber states.

In India, emeralds represent a significant chunk of the astrological business because the stone is believed to bring peace and prosperity.

Emeralds weighing 3 carats and above, priced between Rs.4,000 and Rs.6,000 per carat, are in strong demand for the astrological market and there’s always a shortage in that category, Sen of Gemfields states.

But beauty and the allure of their colour are what drive growth today. Tank explains, “Coloured stones and diamonds complement each other as together they breathe life into jewellery. Bridal jewellery or high end pieces are almost always accented with diamonds and one or more of the big three stones.”

Coloured gemstones have come through the worst of the economic downturn in surprisingly good shape and now seem set to enjoy a period of great growth, especially in emerging markets around the world.

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