Eternal elegance

Akoya pearl was once the most traded pearl worldwide. Despite rapid development of South Sea pearl and Tahitian pearl in the last 30 years, akoya pearl remains the pride of Japan. Historically, akoya pearl was first exported to Europe and then the United States. With Japan’s economic growth it gained popularity in the domestic market. Recently, increasing sales in other Asian markets including mainland China, Hong Kong and Taiwan are remarkable, said Ryutaro Kuroda, corporate officer and administrative manager of K Otsuki Pearl to Hong Kong Jewellery.

Founded in 1930, K Otsuki Pearl became the biggest pearl exporter in Japan in 1975. In 1980 it began selling South Sea pearls. In 1994 it established a South Sea pearl cultivation farm in Indonesia. Currently akoya pearl constitutes approximately 70 percent of its sales and Japan remains their biggest market for akoya pearl. While there are no official statistics Kuroda estimated that akoya pearl makes up about 40 percent by weight and 30 percent by sales of the world’s saltwater pearl production. To them, the biggest challenge ahead is to promote the beauty of akoya pearl to customers all over the world and expand its customer base.

Currently, there are 1,279 akoya pearl farmers in Japan. Production areas include Shima-city, Mie prefecture, Uwajima city, Ehime prefecture, Tsushima islands, Nagasaki prefecture, etc. According to George Kakuda, chairman of Mie Prefecture Pearl Promotion Council and CEO of Kakuda Pearl, while the unit price was only JPY1,300 per momme after financial crisis in 2008-09, it is going to be over JPY3,000 per momme this year (see Table 1). Since the unit price is still growing, farmers’ lives improve, he explained. While most farmers are making profits, they also face challenges.

Despite technological advancement that enhances oyster survival rate and quality of pearls, Tomokazu Tanabe of the 70-year-old Tanabe Pearl Farm which raises about 300,000 akoya oysters annually cited weather as his biggest concern. It is because the oysters are very sensitive to water temperature. Although all farmers have developed their own tactics based on their experience, changes in climate condition such as global warming is forcing them to review their production practice.

In the pearl strand manufacturing and wholesale field, akoya is still the most stable merchandise among all saltwater pearls, said Kakuda. The reason is that world demand for akoya is bigger than supply as there are only limited number of farmers left, so production volume cannot be increased drastically. Another factor is that the price of akoya pearl strands is lower than that of South Sea pearl even in decent quality. Therefore it is an attractive choice for both sellers and retailers.

From the demand-side perspective, Alan Lee, manager of gemstone, jadeite and pearl procurement of Chow Tai Fook said, in the last decade and more, environmental factors such as typhoon, sea water pollution and rising labour costs caused the price of akoya pearl to rise. With the depreciation of the Japanese yen, the price returned to a more attractive level, though overall it remained higher than before. To maintain the quality of pearls purchased they rely on good relationship with suppliers. It saves them time in selection and also helps them avoid accumulation of unsuitable inventory. Regarding customers’ preference on size, Lee observed that akoya pearls ranging from 6mm to 8mm are bestsellers.

Interestingly, in Japan akoya pearls of 6mm or below are the most popular. According to Kakuda, both production volume and unit price of akoya pearl are increasing due to high demand, especially for akoya pearls of 7mm and below. Data from Table 2 illustrates how smaller pearls, especially of 6mm or below, are highly sought-after in Japan due to the low production ratio, which results in price increase. It also demonstrates an inverse relationship between the size of the pearl and level of price increase.

Despite rising demands for and prices of smaller pearls, farmers are not ready to produce more small pearls due to lack of sufficient incentives. Publicist of Mie Prefecture Pearl Promotion Council, Yuichi Nakamura explained that it is due to two reasons. First, to produce small pearls, a special technique is needed to implant multiple beads into the oyster. Second, as pearls are normally sold in momme, farmers can fill one momme with fewer, larger pearls. For instance, it takes three pieces of 9mm pearls to reach one momme but if it is 5mm pearls it will need about 18 pieces. It is simply more economical to produce larger pearls than smaller ones in terms of the number of oysters, beads and effort required.

Table 1: Akoya pearl production (2012-16) 

 Source: George Kakuda, chairman of Mie Prefecture Pearl Promotion Council

Table 2: Akoya pearl harvest auction data of February 2016

Source: George Kakuda