Mandalay gem and jade traders are calling for new rules to prevent foreign traders from disrupting proceedings at gem fairs by making fake bids.
The call results from an incident at the 50th Myanma Gems Emporium in Nay Pyi Taw in June involving Chinese traders, who are major buyers of the country’s precious stones.
The Mandalay traders are calling for regulations requiring foreign traders to pay tax here and also have a bank account in Myanmar before they take part in the auctions.
Trader U Myo Zaw of the Maha Aung Myay jade market in Mandalay said one Chinese trader bid for 600 lots at the June emporium. While he paid a deposit he did not complete payment for any of them.
“His bids were exorbitantly high, and the market was spoiled because other traders were deterred from making higher bids,” U Myo Zaw said.
“The trader was later warned that he could lose his auction fee if he failed to collect the stones he bid for, because his action could cause losses for other traders if he failed to pay for the stones,” he said.
Foreign traders pay 50,000 euros (US$66,700) to attend the auction. While the emporium also attracted buyers from Britain, Malaysia, Thailand and Hong Kong, traders said it was mostly Chinese buyers who tried to manipulate the market.
“They disturb the market by overbidding, which then scares off the other foreign bidders,” trader Ko Soe Nyunt said, adding that they were known to bid double the market value of a lot.
The local vendors are then forced to sell them at a much lower price on the domestic market – often to the same Chinese buyers, traders said.
Ko Soe Nyunt said even when Chinese traders do win auctions with genuine bids it often takes a long time for the Myanmar sellers to receive the payment.
More than 10,000 lots of jade, 379 lots of gems and 255 lots of pearls were exhibited in the Myanma Gems Emporium, including 91 jade and four gems lots with a floor price of at least 1 million euros ($1.33 million).
Source: Myanmar Times