Hefty jump in tanzanite price
The world’s largest miner of tanzanite says escalating demand has pushed up the price per carat, but how will this affect Australia?
Gemstone producer Tanzanite One last week announced a 16.5 per cent increase in the price per carat of rough tanzanite since last year.
How this price shift will affect Australian sellers depends on a number of variables, according to Sapphex director Terry Coldham, one of Australia’s largest wholesalers of tanzanite.
Tanzanite often passes through Indian cutters and polishers, who would pass on any price increases to Australian suppliers.
As a result, Coldham believes, the price will increase further by the time it hits Australian shores.
“I expect it would add up to about 20 per cent,” he said.
However, when the price change will take affect will depend on the current stock levels of local suppliers.
“The stock I’ve got at the moment will remain at the old price,” he said.
Coldham expects it will take “anywhere from two months to a year” before price rises affect Australian supply.
Exchange rates at the time of buying will also play an important part.
Coldham said the strong Australian dollar might offset any increase.
“Compared to last time I bought, the price may end up being the same, because the Australian dollar has risen significantly in the past year,” he said.
Coldham was not overly concerned by any price rise, as “tanzanite price fluctuations are very rapid”.
“Tanzanite is unique. I don’t think there’s any other gemstone where the producer has so much monopoly on the industry that they can arbitrarily put their prices up, he said, adding, “that being said, tanzanite prices have been low in recent times”.
Tanzanite One holds the license to the largest of four mining blocks in the world's only tanzanite-producing area near Mount Kilimanjaro in Tanzania.
According to Reuters, demand for tanzanite outstripped supply at a recent trade show, which signalled strengthening in the tanzanite market.
Tanzanite One recorded revenue of $1.62 million from the sale of 198,337 carats of rough tanzanite at the show.
Part of the price jump appears to be due to new sales strategies from the company.
According to a Rueters report, the company was a surprise exhibitor at the recent Hong Kong International Jewellery Show.
"We are continuing to develop and explore complimentary sales channels, outside of formal sight sales, such as this Hong Kong sale," Tanzanite One CEO, Bernard Olivier, said in a statement.
The company has struggled amid falling revenue over the past two years, however the company predicts a return to profitability this year.
Learn about: Tanzanite
Have "Your say": Login and add a comment below
Posted March 29, 2010