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World Gem Imports
United States | Europe | Japan

U.S. Imports Hit All-Time High

United States gemstone imports hit a record high in 2005, with a total value of $754.7 million.

The previous record was set in 2000, when the country imported a total of $705.4 million. It’s no surprise that imports fell sharply after the September 11, 2001, terrorist attacks; that the gem market was so strong in 2005 is, at least in part, a testament to the renewed strength of the market.

In the United States, unemployment has been down and the stock market up. Increases in income have been highest for the wealthiest Americans, meaning that the strongest market growth has been in the top tier of consumers.

The import figures bear this out. The total import value for cut ruby, emerald, and sapphire was $411.9 million in 2005, a 15.7 percent growth over 2004. The volume, however, was down a total of 3.5 percent. While the government doesn’t track volume figures for gemstones other than ruby, emerald, and sapphire, the total value in that “other” category rose 14.2 percent.

Anecdotally, gem dealers have reported especially strong demand for very fine gemstones. The numbers show that the biggest growth in imports was from countries where dealers trade in the finest-quality gemstones, like Switzerland and France.

In addition to strong demand, prices for these fine gemstones have continued to rise. One factor is the value of the dollar, which remains weak compared to its pre-September 11 levels. Another factor is that top-end gemstones are more difficult to find, and the competition for them is fierce.

In terms of individual gemstones, emerald saw the biggest jump in value — while the import total only increased 12.4 percent, the price per carat was up an impressive 71 percent. This seems to be due more to trading in existing top-end stones rather than newly mined discoveries. However, top emerald producer Colombia had a solid 16 percent increase in the value of its gemstone exports to the United States and a 32.6 percent drop in volume. Brazil, still a major source country despite financial and environmental challenges to mining, had an 18.1 percent increase in value and a 76.5 percent drop in volume.

Ruby imports experienced the same dynamic — the biggest increases in import value came from high-end trading centers rather than source countries. Switzerland was the number-two importer of ruby by value, with the dollar total jumping 154 percent to $28.9 million. Thailand, the unchallenged navel of the ruby universe, saw its total rise 13.1 percent to $48.1 million, just under half of the total ruby imports of $101.5 million.

Sapphire remained fairly level, with the import value edging up 6.7 percent to $173.7 million. The big importers, Thailand at $81.5 million and Sri Lanka at $45.4 million, both saw relatively low increases in import value. Sapphire imports from Germany, where dealers specialize in high-end stones, jumped up 140.9 percent.

In the “other” category, covering all gems except for diamond, ruby, emerald, and sapphire, imports totaled $318.6 million. India continues to rule this category, with $92.5 million in imports into the United States, but the top five saw a shakeup this year: Hong Kong and China’s imports rose 41.7 percent and 35.7 percent, putting them in the number two and number three slot, respectively. Thailand’s imports of “other” gems fell 15.5 percent to $38.2 million, knocking it from number two to number four.

It was a banner year for Hong Kong and China. Hong Kong’s total gem imports into the United States gained a whopping 58.4 percent, for a total of $76.3 million. China’s imports grew 30.7 percent, for a total of $43 million. That makes Hong Kong the number-three gem importer in the United States (behind Thailand and India), and China, number seven.

It’s no secret in the industry that China is getting more and more of the world’s cutting business — the trend has been apparent for a decade or more, although it’s only been in the past few years that the trend has shown in the official figures. For comparison, China’s official gem imports into the United States for 2000 were a mere $10.9 million.

Thailand’s imports in the United States, by contrast, were flat between 2004 and 2005, nudging up less than 1 percent to $175.4 million. Thailand’s gem imports were a nearly identical $174.5 million in 2000, although there have been fluctuations in the years between.

Thailand’s gem trade has been investing more in finished jewelry than in loose gemstone export over the past few years, and so has done little to increase its market share. Even so, Thailand has held its ground in the ruby and sapphire trade, traditionally its strongest categories. China, by contrast, has 96.7 percent of its gemstone trade with the United States in the “other” category.

Hong Kong, a major trading center even aside from its status as the gateway to China, has seen huge growth in every category. Its sapphire imports into the United States were up 114.9 percent from 2004 to 2005; emerald was up 110.6 percent; and ruby, 60.4 percent. Like China, Hong Kong’s main gem trade used to be in “other” gemstones. It appears that, boosted by the boom in China’s economy, Hong Kong now has enough wealth to become a major trading — and consuming — center in its own right.

In 2006, analysts have been surprised by the United States’ ability to stay on an even economic keel, despite hurdles like high gas prices. Combined with rising gem prices around the world, gem imports look poised to keep on rising.

Europe: Strong in the Classics

If you only look at the bottom line, European Union colored gem imports fell in 2005 — but that would give you a very misleading picture of what’s happening in the world’s second-largest gem market. Most of that fall was due to an unusually high level of rough imports into a single country in 2004; take that country out of the equation, and gem imports for 2005 actually increased 9.2 percent in value. Total imports for the year were €383.6 million (US$479.5 million).

By far the strongest category was cut ruby, emerald, and sapphire, accounting for nearly two-thirds of the gem market at €248.8 million ($311 million). The major players in this market have remained the same for the past few years: France, with a 2005 total of €110.8 million ($138.5 million), followed by the United Kingdom at €52.2 million ($65.3 million), Italy at €38.1 million ($47.6 million), and Germany at €22 million ($27.5 million).

France and the United Kingdom are not major consumer markets for gemstones, but they have a strong trade in top-end gemstones — jewelry for the upper crust of society — and often the stones they buy end up finding buyers in other countries. Italy has a strong jewelry manufacturing industry as well as a brisk domestic market for colored stones; in 2005, their imports grew a healthy 17 percent in euro terms. Germany, a well-known gem trading center, saw its cut ruby, emerald, and sapphire imports grow 20 percent.

In the “other” cut gemstone category, Italy and Germany came out on top at €29.4 million ($36.8 million) and €21.5 million ($26.9 million), respectively. They traded places with United Kingdom (€14.7 million or $18.4 million) and France (€13.4 million or $16.8 million) in the third and fourth positions. This may reflect a difference in international demand versus domestic demand: Internationally, and particularly in the United States, the “other” category is in strong demand. In Europe, ruby, emerald, and sapphire are revered as classics that never lose their value, particularly rare, untreated gemstones.

There’s a sharp divide, however, between the old guard of the European Union — the original 15 members — and its new additions.

In 2004, 10 countries (Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia) joined the European Union, drastically changing its makeup. The bulk of the economic power remains in Western Europe, particularly in nations like France, Germany, and the United Kingdom. That’s reflected in the gem statistics, where the newly-added bloc of members accounts for only 1.2 percent of total imports, while France, Germany, and the United Kingdom alone were 68 percent.

Still, Eastern Europe is building steam. That’s most obvious in the “other” gem category, where the original EU-15 countries saw a growth of 2.9 percent, compared with a 204 percent growth from the new members. In cut ruby, emerald, and sapphire, the growth rate was slightly slower — 90 percent for the new members, versus 10.6 percent for the EU-15 — and they accounted for a much smaller percentage of the total (0.1 percent in ruby, emerald, and sapphire; 4.6 in “other” gems).

By far the strongest country in the bloc is Poland, whose gem imports grew nearly 350 percent between 2004 and 2005; the country now imports more colored stones than Greece, Portugal, or the Netherlands. The Czech Republic and Hungary also saw strong growth, while other Eastern European nations lag behind.

But the message is clear: Not only is Eastern Europe expanding its demand, but they’re interested in a range of gemstones rather than focusing on the traditional trifecta of ruby, emerald, and sapphire. It may take years before the region becomes a major force on the market, but they promise great rewards when the time comes.

For more on the gem market potential in Eastern Europe, see “New Kids on the Bloc,” Colored Stone, March/April 2006.)

Japan: Still Fighting

Japan’s gemstone imports rose in 2005 to ¥16.7 billion ($152.1 million). The 3.9 percent growth rate is higher than the growth of Japan’s overall economy (2.8 percent in 2005), but the country’s gem market still faces major challenges — wavering consumer confidence following scandals about treatment disclosure for one, and uncertainty about the country’s economic future for another. While Japan seems to have finally emerged from its 15-year financial slump, it may take time for consumers to relax and start spending.

Virtually all of the growth in Japan’s gem imports was in the “other” gems category, which expanded 17.2 percent to ¥10.5 billion ($95.4 million). Ruby, emerald, and sapphire, meanwhile, fell 12.8 percent to ¥6.2 billion ($56.6 million), marking the eighth year in a row that the West’s “Big Three” lagged behind. Despite efforts by the trade to promote ruby, emerald, and sapphire, Japanese consumers continue to favor other gemstones — particularly rare and high-quality gems.

No surprise, then, that Japan’s gem imports from Germany — where traders have an international reputation for excellent cutting and quality — increased 7.3 percent. Imports from gemstone-producing giant Brazil fell 4.7 percent, almost entirely because of a drop in Japanese demand for Brazilian emeralds. Imports from Colombia, still the world’s premier source of emerald, plunged 40 percent.

The only country that was able to achieve significant ruby, emerald, and sapphire imports into Japan was Thailand, which contributed ¥3.6 billion ($33 million) of the total. Thailand is the world’s largest trading center for ruby and sapphire, and in recent years traders there have worked hard to maintain strong trading ties with the Japanese. Thailand also exported a significant amount of “other” gems to Japan (¥1.7 billion or $15.7 million), but in that category they were easily outdone by Hong Kong (¥3.1 billion or $28.9 million), which specializes in the “other” category.

With Japan pulling out of its long recession, the future looks bright — but economists aren’t cheering yet, and neither are Japanese consumers. The world’s second-largest economy has a long way to go before it challenges gem markets in the European Union or the United States again.

July/August 2006 • Dubai: Color in the City of Gold • Reader's Choice Award: Hometown Girl • Gem Imports: U.S., Europe, Japan • In This Issue