If you’ve been buying gems in the last few months, you will have noticed that gemstone prices have been sharply on the rise. Obviously, this is a general trend as supply chain issues, wars, border closures and internal political problems have disrupted the entire world, not just the world of gems.

The Paraibas shown below were worth only 1/3 of their current value when they sold in 2016:

Paraiba cabochon, 2.05 carats, sold in 2016 for $1537

Paraiba Cabochon, 1.51 carats, sold in 2016 for $2718

Paraiba Cabochon, .68 carats, sold in 2016 for $679

Paraiba Cabochon, 2.75 carats, sold in 2016 for $2200

However, in the gem trade in particular, there is more pressure for material than there has been in several decades, and not just the past couple of years since Covid.  Back in the 1980s and early 90s, there was a bit of a boom with amethyst, citrine, red garnet and topaz among others, but it’s been fairly even-steven until more recently.

When I started selling loose gems around 2009, very few buyers were asking for unheated sapphires or unoiled emeralds, and nobody asked for cobalt and jedi spinel, hauyne, benitoite or kornerupine, even Paraiba, although all of those gems existed back then! These days, we see a much more educated buyer who wants to know the origin and treatment of gems, and who is requesting certificates for evidence.

This is likely due to the increase in internet education and direct (international) internet sales, but it is also the result of celebrities buying colored gems. Nowadays, buyers know what kinds of gems are rare and they want to have something unique rather than what they can get in a regular jewelry or chain store at the mall.

This change in consumer behavior has caused luxury jewelry brands to pay significantly more attention when they acquire gems, and that in turn has led to a squeeze as no colored gemstone worth investment attention comes in near sufficient quantities to meet such a demand. In Manhattan we can see this trend unfolding first hand because most of the luxury brands, including but not limited to Tiffany’s, have their main location in NY and operate closely with the Trade on 47^th Street.

Word on 47th street has it that since 2021, these major jewelry houses are investing significant funds into securing gemstones with fewer treatments and enhancements, and paying a premium for acquisition! Some go as far as refusing to buy any gems from conflict zones such as Myanmar, the Congo, Afghanistan, or gems that have significant treatment like resin treated emerald from Colombia. Even heated sapphires are avoided in the market these days despite the fact that over 95% of sapphires are routinely heated, making unheated sapphires very hard to come by and expensive. This is a very significant development in the trade and I want you to take note of this, both with regard to what you want to buy but also with regard to what you have!

Now, let’s look on the supply side. Here, there has been an opposing trend, with production, availability and international exports actually shrinking. I was told, for example, that diamond prices have increased about 15-20% in just a few months. This has been the result of several major developments since around 2020, mainly of course the pandemic, but that has been by no means the whole story.

But let’s start with Covid 19. Some border closures remain in effect more than two years post the initial lockdowns. Otherwise, entry is subject to long quarantines, as is the case in Hong Kong and Vietnam, which are both facing some of their worst outbreaks since 2020, just as they were getting ready to reopen more broadly and had reduced their quarantine time. While Hong Kong does not produce gems, it is a major center for faceting them and for jewelry production and thus very important to the trade. With increasing pressure from China, many do not expect Hong Kong to be a major player in the industry in the future.

Gems from Vietnam have gained a lot of popularity lately, in particular, with cobalt spinel but also the somewhat lesser known lavender and pink varieties. But export from Vietnam is still mainly achieved by direct export, that is, by taking the gems or the gemstone rough across the border in person, i.e. by airplane from Hanoi to Bangkok. Needless to say this has been near impossible for over two years now, and things are not yet improving. In addition, the government has banned mining in the Luc Yen region, so while the gemstone market has reopened, there isn’t much new material. I do not know the reason why, unfortunately.

Thailand has just recently eased its restrictions but even though it is richer than Vietnam, vaccine and testing capabilities are not at the level that we can expect in the US, Canada or Europe. This will continue to disrupt trade as Bangkok is one of the world’s leading gem cutting and trading centers. Export has been largely by shipping since 2020 (rivaled by direct export before that). Word also had it that in Tucson 2022, Thai buyers came to purchase as opposed to selling, because, as a Bangkok buyer told one of my sources, some prices on sapphire in the US were lower than in Thailand by as much as 40%.

Also, because of the many border closures, tourism has not yet returned to its pre-pandemic levels, and countries such as Thailand, Vietnam but also Sri Lanka (among many many others) suffer from the lack of tourist income. In fact, Sri Lanka, a world leading producer of corundum, is on the verge of total economic collapse; there are food and fuel shortages, and the government is no longer able to pay back its foreign debt. This has a direct impact on mining because much of the small machinery used runs on diesel.

But not all supply chain problems in the colored stone industry are due to the pandemic. Political crisis has impacted the government of Myanmar, for instance, when in February 2021, the fledgling democratic government was taken over by the military party, the Junta once again. So Western nations cannot buy gems from Burma (Myanmar) anymore unless they want to buy them from a political dictatorship. The small illegal trading along the border between Myanmar and Thailand is down as well. Already exported Burma ruby and sapphire, but also spinel, have continued to rise in price, while at the same time, the major jewelry houses will no longer buy any ruby from Burma even though it’s not officially banned. As is so often the case, these companies think ahead by more than just a few months, and they do not want to advertise gems that come from conflict zones regardless of when they were sourced.

Moving East along the map, The U.S. withdrawal from Afghanistan and its pursuant takeover by the Taliban has resulted in similar restrictions on the trade, impacting imports of emerald, for example. Gems can find a path out of the country via less traveled routes but that, too, has become very difficult. As far as I know there’s no gem purchasing right now on the open market in Afghanistan. Previously, the democratic government supported by the US was making import and export easier.

Speaking of the Asian continent, exports of demantoids and emeralds from Russia have always exacted a price to the government - I’m going to leave you to ponder the ethical distinction between what constitutes a government tax or a government exacted bribe in the case of a dictatorship. It has therefore never made sense for Russian gemstone sellers to bring back their inventory from a show outside of Russia.  Once exported, the gems remain in places like Hong Kong, where they have been since 2020 when travel there became nearly impossible, and will continue to sit now that Aeroflot is grounded and other air traffic to Russia on hold. Russians cannot leave the country, so they also cannot get to their merchandise to sell it.

From Russia, one’s thinking wanders naturally towards the Ukraine, and to the export of natural topaz. I witnessed a sale of natural bi-colored cognac (see video below) and blue topaz in Tucson. The seller was maybe 22 years old, and he had mined the gems together with his father. With poor English but a lot of pride, he was able to tell us exactly the block and lot number of his find for proper block chaining; meanwhile a well-known cutter who also observed the sale weighed in on how he would shape the rough. The deal was done, both parties were happy, and the grapevine tells me that there are further attempts to continue this fledgling business relationship during war time. I don’t know the details, and if I knew I would not share.

Last but not least, there have been some events unrelated to the pandemic or governmental crises. For example in 2018, the Tanzanian government prohibited exports of facet gemstone rough because it – correctly - perceived that the main profits in colored gems occur after the rough material is faceted, not before. The Sri Lankan and Colombian governments, have long restricted the export of gemstone rough, for precisely this reason. But both countries have been perfecting the cutting trade for many years, whereas Arusha, Tanzania had no more than a few dozen experienced cutters when the then new government suddenly instituted its new law, and despite many of the master dealers meeting with the president directly, the law was upheld for over a year.

When Covid hit in 2020, the Tanzanian president claimed that Covid did not exist in Tanzania and that masks were unnecessary. As a result, a few of the major gem dealers that had helped to build the trade in the 1970s simply retired and some even left the country. The Tanzanian government has since adopted a less strict stance towards gemstone export – partly because its president died in 2021 (from Covid, it appears), and the new president has a different agenda. But the Tanzanian economy has suffered nonetheless because aside from gemstones it mostly lives on tourism. These days, most of the export from Arusha is in the hands of well-funded Sri Lankan families who have tried their luck elsewhere. And many of these goods, in turn, are sold to China and other Asian countries for higher prices than they fetch in the United States.

Sri Lankan traders also happened to be involved in the event that caused the present export blockage in Madagascar that started just a few days post border reopening in November 2021. The story was all over Tucson but I also know some of this from my Malagasy friends who heard the same rumors in Antanarivo. In early November, a passenger boarding a diplomatic flight refused to check in his hand luggage even though it was slightly overweight. The luggage was eventually opened and revealed a parcel of uncut gems with an invoice for garnet for approximately USD 13000. The gems, however, were sapphire, and the estimated value is over a million USD. The traveler was arrested and all airport customs officers were also arrested for accepting bribes. (It’s a very tiny airport so imagine a couple dozen arrests). In addition, five members of the “Departement de Mines” were arrested for accepting bribes. As a result, mining sapphires (from Ilakaka) is forbidden right now and the mining director is currently hiding somewhere on the island.

All this said, keep in mind the following: the French word for bribe used by the Malagasy, is the word “cadeau” which actually means gift. This is VERY telling as it isn’t a word used merely to obfuscate the fact that a bribe is paid, but also because the need to secure food for the family without losing face by admitting one’s poverty is best recharacterized as the request for a voluntary gift. Border officials and mining department employees have very low salaries, but they are uniquely situated to be able to slow down or speed up the export of a rich Vahiny (stranger) by kindly requesting a small present. Really - the presents are small, no more than perhaps $25, which equals a weekly salary (this is a low salary even for Madagascar). Some gifts can go up to $100 but I have not personally seen anything larger than that.

That said, tens of thousands of USD, and an invoice that understates the value by 95%, is another matter entirely, and one where the government will not ignore the issue (in fact one may surmise that the government would express some interest in a more “official” bribe in form of a tax). So, once said Sri Lankan with a diplomatic passport was caught and put behind Madagascan bars, no bribe was large enough to buy him back out. And people in the mining office have decided that returning to work could get them arrested. Not even employees of DHL are willing to send packages with gems now, even if cleared by the mining division. The income even at DHL is pretty low, the substitute income one can expect from working at customs, at an international shipping agent, or a government office (like mining) is now just too risky. So at the time of this writing, these offices are, and remain, closed.

As it always is in economics, the causes for rising prices, and this includes gemstones, is never straightforward, and it involves certain contingencies that one may not have expected, like an overweight piece of hand luggage!

For this particular blog, I conferred with nine knowledgeable people that shared information with me that I would not have otherwise had access to. I, and my readers, owe them our thanks.

Here are a couple of lovely spinel examples currently available in our shop: 

I can't believe how quickly the Tucson Gem & Mineral Show is coming around this year: I got back from Germany last Thursday night, where I spent a lot of quality time with my mom, and then I realized: I leave in THREE WEEKS!  I changed my Tucson travel dates this year because several shows start before my big ones (i.e. AGTA and GJX shows.) The AGTA gives booths only to their own vendors, and the GJX has a long waiting list to get a spot, so gem dealers like my opal vendors and some of my spinel vendors attend some of these other shows instead.

Here then is the big question: is there really anything new this year?  How’s this even possible?  Well it actually is possible thanks to new finds, such as a spinel find in Vietnam last summer; with lucky buys from my vendors, and with lucky buys from yours truly, those will arrive from overseas in February.

Let’s start with, well, ME.  As my friend Jochen from Jentsch Minerals was just in Madagascar, I bought some high quality grandidierite through him.  This time the gems are a bit larger, but not so big that they will break the bank.  On my WhatsApp the colors looked juicy and the gems sparkly, but my friend Gael is still learning to take adequate video (and admittedly he doesn’t have a state-of-the-art cell phone).  

In other ways, too, my “Tucson buying” has already started, as several of my vendors have given me the opportunity to make pre-show selections.  I have several boxes of Burma spinel melees on my desk already.  You will see these roll out in the next three weeks.  If these move well, I may stock up!

I have also negotiated to buy up an old production of Vietnamese lavender and lilac spinel pear shapes, small sizes, good for earrings, stacking rings, and I will come up with some other designs for them as well.  I will be able to price those fairly reasonably.  I was hoping for more lilacs and neon pinks in other sizes but right now that market is wiped clean.  But, some larger purples and lavenders are an option for me.  I’ve seen most of what will be presented via WhatsApp, it’s just a question of what I want to put aside...These pieces would be more expensive though, figure on several thousand for one piece since they also weigh a couple of carats, so it multiplies out in two ways (price and carat weight).

Related to this, I of course, keep getting asked about paraiba.  Having scoured this market for years, this is what I know: there are about 6 decent paraiba vendors in all of Tucson.  One or two are Brazilian with outrageous prices and they don’t allow you to memo gems.  I don’t buy there.  I wouldn’t be able to offer a return and the price would be high for that.  There’s another vendor, not Brazilian, who has top (top top top) quality pieces but those are in the 30K and up range, so I haven’t ever bought those.  But, they are amazing!  Another vendor from the US used to have stuff but he’s fairly sold down and I’ve passed on the rest.  The final two with anything but crumbly overpriced stuff are here in NY and I see their selection before it goes to Tucson.  I have three pieces that I am holding back on for now, available only upon request, and for the moment at least, I have no plans to buy in Tucson directly.  For me personally, and therefore for you, there’s no advantage in doing so.  If you have requests, please let me know and I will source if I can.  For the rest, as you know there will be a sale coming up, so you can buy the stock I still have.

Regarding the melee paraiba, there is a little bit left with my melee vendor, and I source it as needed.  I would buy it up but it would tie up all my cash flow, so that’s not an option for me, but production of these ended years ago.

In other news, I am negotiating for a small production of benitoite before it hits Tucson (it sells out on the first day)!  I was also shown some Vietnamese ruby and sapphire melees that I am interested in, but I haven’t made a decision yet...

I am going to stock up more on the high quality moonstone this time.  The main cost there is from cutting, not lack of availability.  If there are any requests, please let me know as I will be a very busy bee this year!  

The other thing I will stock up on are ruby and sapphire melees in all colors and sizes.  This is pretty much an all day thing, or a several day thing, as I have to match down suites.  The vendor has pre sorted parcels, i.e. 5 shades of lavender rounds in the 2-2.5mm size.  He will then sift out, say, 2.2mm from the shade I like best, but then I still have to match them.  Sometimes I think there are as many lavender and purple shades of sapphire as there are stars (or maybe I’m seeing stars as time passes).  Matching these is a job only for the obsessed.  So it’s fine for me…

Let me list here what I can get, and if you want to help me, in a manner of speaking, let me know what you might like, i.e. size, shape, amount.  Otherwise, I will just pick what I think is best.  

Blue sapphire: shades of blue, vibrant to light to dark, 1-3mm rounds mainly but other shapes also.
Ruby and pink sapphire: same idea, from light pink to deep pink to ruby color, all pre-sorted.
Lavender sapphire: light to medium, not super dark, but nothing in 1mm.  1.8 is the smallest I’ve seen.
I can also get teal, tealish-green sapphire, and I can get other shapes: 4x3 ovals, marquis, small pears.

Anything aside from lavender is heated or a mix between heat and no heat.  Lavender is usually from Madagascar and is not heated, just because at the moment, that’s the main supply line for this shade.

I’m sure I’m forgetting something, but for now this is all I can think of.

One final note.  Photos: I will of course keep you posted on Instagram and Facebook, and I will put out as many listings as I can manage.  What I will not do, however, is publicly post photos of gems that I haven’t bought yet or of selections at booths.  I don’t usually do that anyway, but as this has become a widespread practice, here’s my two cents. Vendors don’t like it, especially for finer goods.  Once a gem is “out there and been seen”, possibly with exact specs, those gems are kind of “spoiled”.  And if several people show the same gems, it gives a false sense of availability.  

There are also small sellers that pre-sell goods based on vendor photos at a low markup.  But they can’t offer a good return policy and they run the risk of selling you something that is no longer available once you pay.    

On Instagram, I’ve also even seen photos from wholesale websites (taken without permission,) sometimes shown by several different vendors, but when you ask, the gem isn’t available.  I’ve witnessed a small retail jeweler doing so on his website, and I’ve even had my own photos taken and reused both on Etsy and on Instagram.  I’ve even seen sellers photograph gems in vendors' boxes with the price on the front, thereby signaling that they were selling without a markup, when in reality, wholesale vendors provide (sometimes steep) discounts on that product.  
As much as I love the internet as a selling platform, I find that it provides a lot of confusing information, and I don’t want to add to the confusion.  Whatever I have for sale is either (a) mine, or (b) given to me on legitimate memo and just for me to sell for the duration, and (c) to the best of my ability, has not been in the hands of other vendors.  Caveat on that: sometimes I decide to show a gem that I co-own, or that I know is on a friend’s website, or that I was told has been shown around.  That’s ok, as long as I can make that decision.  But increasingly, I have decided to forego some selling opportunities because the gem has “been around the block already,” possibly at a multitude of prices.  So if vendors show me their rare goods, I usually ask them directly.  That way I can give full disclosure to my own clients so that they can make the best decision for themselves.