Thursday, September 21, 2017

Jade traders call for open market as sales reach new lows

Plummeting demand from China has spurred jade traders to demand the right to sell internationally.

Traders say the economic slowdown in Myanmar’s giant neighbour, and the anti-corruption campaign now being conducted by Beijing, have caused a catastrophic drop in sales to their major customer.

Over the past three years, Chinese interest in Myanmar jade has dwindled almost to vanishing point, say gem and jewellery companies.

U Thaung Han, secretary of the Myanmar Gems and Jewellery Entrepreneurs Association (Myitkyina), says jade transactions have become extinct, not just at the border but also in the gem marts of Kachin State and Myitkyina.

Markets, including the Mandalay gem market, are also suffering from the lack of raw material.

Even last July, vendors at Mandalay’s Maha Aung Myay centre were complaining of a shortage of high-quality new material and falling prices.

On the other hand, traders previously told The Myanmar Times that sales in Hpakant are booming, with many Chinese buyers preferring to purchase stones directly from the jade mines. This means that many of the higher-quality stones no longer make it to markets across Myanmar.

China’s market dominance is due to United States sanctions on jadeite imports, which have driven all other buyers from the market, industry experts say.

Ko Kyaw Zin Htet, who works at the centre, says Myanmar traders face losses because they have to sell finished products, which fetch only low prices. This year the cooling market has turned positively frosty, he said.

Secure in their near-monopoly, Chinese buyers can pay the lowest prices for the highest quality stones. “Things are so bad people are getting out of the jade industry and finding other work,” he said.

U Thang Han said, “The whole market has collapsed. Throughout the country, nothing is happening. This is the worst market I’ve seen. Sagaing, Mandalay, Yangon, Myitkyina - prices are down everywhere. China used to love our jade. But with their economic slowdown and the anti-corruption campaign, they don’t come to the markets anymore.”

Economic growth in China is expected to slow to 6.3 percent in 2016 and 6.0pc in 2017, according to forecasts by the International Monetary Fund.

U Too Khaung, general secretary of the Myitkyina association, said the time had come to open the market up to other countries, particularly the West and ASEAN. He said the association had sought permission from the Ministry of Mines to operate internationally.

“We want to look beyond just China,” he said, adding that the lifting of US sanctions could help revive the jade market on an international scale.

The real goal is freedom from United States sanctions, said U Win Htein, director general of the ministry’s mining department. That could open up a global market not just for raw jade, but also for finished products, in a much more transparent trading environment.

U Hla Htun Aung, the association’s national secretary, said such a development would swell government revenues.

Meanwhile, there are signs that amber may be profiting from woes in the jade industry.

Sales in Myitkyina are said to be good, as buyers associate amber with good health and fortune. Though returns are still modest, interest has been growing over the past couple of years, traders say.

There are about seven types of amber, and pieces that contain dust particles can sell in the hundreds of thousands of kyat.

Translation by Emoon