The pearl auction in Dubai, with gems worth as much as $35 million on offer, marks the evolution of the Emirates' historic role in the pearl industry.
Dubai hosts inaugural pearl auction
Dozens of containers filled with pearls sat in rows on a long line of tables while more than 100 buyers from 20 countries milled about.
The auction, which featured pearls ranging in colour from champagne to steel-grey, was a low-key affair held at the Dubai Multi Commodities Centre; no gavels, no frantic bids, just the sound of pearls clinking against each other and muted chatter.
The atmosphere, however, belied the true weight of the business being conducted . The gems on offer were worth as much as US$35 million retail (Dh128.5m), or $13.5m wholesale.
And last week's auction, which attracted offerings from major producers including Robert Wan, Jewelmer and Paspaley, also marked the evolution of the Emirates' historic role in the pearl industry.
"We've gone from a pearl-producing nation to now a facilitator of trade," said Malcolm Wall Morris, the chief executive of the DMCC.
Pearlsare an integral part of the UAE's history, as it was the naturallyoccurring treasure that brought the Gulf its first taste of wealth. It was for pearls, rather than oil, that the region was once renowned. The gems were exported to India, Persia and sold on to the European and Chinese markets.
But after the invention of cultured pearls and later the discovery of oil, the 80,000 workers in the pearl sector had to find jobs elsewhere. There are still pearl beds around the UAE coast but the industry is a shadow of what it once was.
Efforts to revive the UAE's role in the pearl industry are under way. The Pearl Revival Committee, based in Abu Dhabi, is working with scientists to find a way to strengthen the pearl-producing oysters and protect their environment and to promote the emirate's pearl heritage.
Dubai, meanwhile, has pushed to establish itself as a centre for the trade of pearls, both cultured and natural, with the launch of the Dubai Pearl Exchange, where the two-day auction was held.
About 60 per cent of the buyers came from Japan, with the rest hailing from Europe, India and the Middle East.
Neither the results of the auction, nor UAE pearl trade figures for last year, have been released. Audrey Tcherkoff, the general manager for Robert Wan in the Middle East, said she could not give specific figures, but said about 65 per cent of all the lots on offer were sold, higher than expected for the first auction at the DMCC.
"That is a very, very good start," she said.
An estimated Dh99.6m worth of pearls were traded through Dubai in 2009, up from Dh95m in 2008.
The past two years have been a difficult period for the industry. It was hard hit by the recession as consumers put off non-essential purchases and jewellers in turn cut back on their buying of raw materials, such as pearls.
Ms Tcherkoff said Robert Wan's global sales were down by between 25 per cent and 30 per cent in 2009 and last year, compared with 2008.
Brands "decided to stop their purchases, that's why the wholesale sales have dropped", she said.
Pierre Fallourd, the assistant managing director for Jewelmer, also said 2009 was a tough year, with sales also down between 25 per cent and 30 per cent compared with previous peaks in 2007.
Ms Tcherkoff said the company did not expect a major rebound in wholesale pearl trade this year, and it was instead shifting its focus to retailing its own jewellery, where the profit margins were higher. Robert Wan already has a jewellery store in Abu Dhabi, at the Emirates Palace hotel, but it plans to open four stores in Dubai by the end of March, Ms Tcherkoff said.
"By building our [brand] name, we can face the [financial] crisis in a better way," she added.
Although Jewelmer said there had been a strong rebound in its wholesale business during the second half of last year, it, too, was concentrating on its retail jewellery business for the same reason as Robert Wan, Mr Fallourd said.
"Our company's focus for many years has been wholesale," he said. "Although we have been manufacturing and designing jewellery for the past 30 years, we're shifting our focus and energy on the end consumer. That is where the margin is."