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Glut in Low-Grade Jade Dampens Sales for Sixth Straight Year

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Expectations for better demand and stronger profits among jade traders in Mandalay fell short in 2017. Weighed down by an oversupply of low-grade and a shortage of top-quality stones, sales have fallen for the sixth consecutive year and a rising number of traders are calling it quits.

“We suffered losses as the market was not good,” said U Aung Win Oo from the Maha Aung  Myay Gem Market Welfare Association.

A merchant himself, U Aung Win Oo had purchased three raw jade lots for K600,000 during the year. But due to poor demand, the stones were worth just K250,000 in the market after being cut and processed.

The way he tells it, “the trader who manages to fetch a profitable price for his jade merchandise in the current market is a very rare one.”

Among the reasons for the slump in price is poorer jade quality. “Although high quality jade is rare, there is plenty of low-grade jade in the market. We don’t get good prices for such stones,” U Aung Win Oo said.

Ko Maung Lwin, a bracelet maker based in Mandalay, agreed that good quality jade is becoming rare. As a result, he has resorted to buying lower-grade stones to make his jewellery. Still, profit margins have narrowed. “When I sell bracelets made from cheaper jade, I don’t earn as much compared to the higher quality products,” he said.

Jade glut

Low quality jade has been flooding the market because jade mining firms in Hpakant, Kachin State, are upping production before their licenses expire, said U Aung Win Oo. Meanwhile, supply is piling up in China, the largest buyer of Myanmar jade. As such, prices have dipped over the past few years.

“For the past 4-5 years, jade sales at Maha Aung Myay jade and jewellery market in Mandalay have declined and this year has been the worst,” said Ko Soe Nyunt Aung, a jade trader at Maha Aung Myay.

To put things into perspective, Ko Soe Nyunt Aunt said he purchased a raw jade block in Hpakant for K10 million this year. Back in Maha Aung Myay however, the same block fetched just K8.5 million

“With the oversupply of low-grade stones in the market, even if we did sell some products, we did not make much profit from them,” he added.

Ko Wai Phyo Thu, a jade trader at Maha Aung Myay market for the past decade, said he has been facing problems too. “It’s not that there are no sales taking place. It is just that a lot of the items I sold left no profits for me. This year can be said to be the worst year for business so far. It is now difficult for me to continue in this business,» he said.

Emporium sales

The government has made efforts to give the sluggish jade market a boost over the past few years. It continues to host the bi-annual Gems Emporium in Nay Pyi Taw, each year. The emporium allows merchants to sell high-quality jade pieces via auction to traders worldwide.

“When domestic traders buy jade and other gems at the emporium, many of these stones will end up resold at Maha Aung Myay,” said Ko Soe Nyunt Aung. “If that is the case this year, then the market may improve in 2018 and we hope for better prices then.”

Things are looking positive for now. At the recent mid-year Gems Emporium between December 12-21, jade traders managed to sell a total of 5,054 jade lots worth €438.58 million, according to data provided by the emporium committee.

That represented an improvement from the previous year’s emporium, which generated total revenues of €328 million from the sale of 4,085 jade and gem lots.

While one lot of six jade stones priced at €100,000 fetched €12.5 million at the auction , two jade lots priced at €5.8 million each were not sold.

A total of 4,432 gem merchants attended the emporium, of which 2,827 were Chinese merchants and 1,580 were local merchants.

Still, many traders remain concerned about the market in the coming year. “Jade traders are always hoping that if the market is not good this year, it will be good the next. After continuing to disappoint us for the past few years though, many of us aren’t holding our breath,” said Ko Soe Nyunt Aung.

 

Source: The Myanmar Times

 

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