Jade sales slump big time in Asia; “The bubble of low to middle end jade has burst first given the little fear of raw material shortage. By the end of the year, the prices will start to drop from the sky.”

Jade sales slump big time

Wednesday, Sep 18, 2013

The New Paper

Prized as a magical imperial stone, jade is a status symbol of the super rich in Asia. But rocketing prices in the top-end of the market have left traders in Hong Kong struggling to find buyers. The price of raw jade has risen over the past eight years. Driven up by the appetite of wealthy Chinese, the rising cost of jade is also being fuelled by fears of a shortage in supply from Myanmar, the key source. “Consumers cannot accept the current high prices, therefore, no deal is reached,” Hong Kong jade dealer Li Kwong-kei told AFP at the Hong Kong Jewellery and Gem Fair last Friday.The dealer who has participated in the fair for more than 10 years, said it was quieter than in 2011 and last year.

“We are forced to raise prices – it is increasingly hard to get high-quality raw jade from Myanmar. If you do not pay more, the good raw materials will be owned by the others,” the dealer said.

Small businesses have also been affected – stallholders at Hong Kong’s famous outdoor jade market while away hours chatting with their neighbours, as there aren’t many customers.

“I have seen some of my peers quit their businesses,” said stall owner Wong Fungying.

“The prices are high while the market is quiet.”

With no international pricing system, values have been increasing since 2005 as the newly-rich in China have bought up jade products. Seen as a classier option than gold, it has become a status symbol.

Dealers worried

Dealers are worried that quality raw jade from Myanmar is dwindling as the country plans to process and sell its own jade products.

Myanmar keeps its cards close to its chest in a famously murky trade, and rumours are rife among dealers about its plans as the country opens up economically.

Jade dealer Liang Jianhui, based in southern China’s Guangdong province and one of 7,000 buyers at the gem auction in Myanmar’s capital Naypyidaw in June, told AFP that he could no longer afford to buy high-quality jade.

One bidder told AFP the auction had been less busy in the past two years than previously, with high prices putting dealers off.

“I set aside more than two million euros (S$3.4 million) for the auction, only to find that I am too poor to win a bid for one single piece of top-end jade,” said Liang.

“If a piece of raw jade sold for 100,000 euros in the past, people would make an offer of 500,000 euros for the same one this year.”

But deputy director of Yunnan Land and Resource Department Li Lianju who oversees the jade trade between Myanmar and China’s Yunnan province, said prices of lower-grade jade are already dipping.

“The bubble of low to middle end jade has burst first given the little fear of raw material shortage,” he said. “By the end of the year, the prices will start to drop from the sky.”