Change has been building in the Tanzanite industry over the past couple of years. We have highlighted the rise of emerging markets like China in past posts, commenting on the proliferation of Chinese buyers in the local market recently. This is a symptom of the larger change that has been engulfing the industry of late. Traditionally, western markets have purchased the bulk of Tanzanite production, harking back to the late 1960’s when Tiffany & company first unleashed this remarkable gemstone upon the world. Whilst western markets are still heavily influential in the Tanzanite industry, emerging markets such as China have been awakening and are becoming more involved each passing year.
The impact from this is profound. Firstly, the traditional markets in the west are now competing with the newcomers for production, particularly the finest stones. This has had the effect of creating inflation in the market where it wouldn’t have existed before. When the financial crash of 2008 hit the world, western markets still dominated the Tanzanite industry. As a result, the crash and resulting drop in demand in the west had a strong impact on Tanzanite prices. Whilst the very finest, rarest grades were not affected, medium grades lost a substantial part of their value. As the recession has worn on, prices had remained stagnant until this past 2 years, when price inflation started creeping back into the sector. Dealers who dealt exclusively with the west couldn’t understand where the inflation was coming from as their experience was that demand in the west was fairly flat. Those that had a wider reach however, understood fully that other influential buyers had entered the market and the increasing demand from these countries was behind the upward push in prices.
Overall, this is good for the industry as it creates a hedge to price deflation during recessionary times as well as new driver for growth and price inflation which will give investors in this beautiful stone every reason to be excited. Tanzanite’s “eggs are no longer in one basket” as the saying goes! Richland Resources’ Gavin Pearce and TanzaniteOne sightholders Colorjewels and AG Color are confident that demand for tanzanite, the purple-blue gemstone that has captured the fascination of jewellers and aficionados worldwide, will continue to gain momentum in 2012. More on this topic in this Jewelry News Asia article.
Lapigems Gem Company