Raw jade blocks are unloaded outside the Myanmar Gems Enterprise’s headquarters in Mayangone township, Yangon, in this file photo taken May 10, 2006. An official with the MGE said jade sales are likely to bring record foreign exchange earnings in the 2007-08 fiscal year, with the enterprise’s next auction in October likely to set yet another record for income from a single sale. Pic: Hein Latt Aung

THE government is anticipating record foreign exchange earnings from gem and jade sales this year as strong demand from China pushes up prices at local emporiums, an official with the state-run Myanma Gems Enterprise said.

“The Chinese are investing more and more in jade trading. They know it’s a profitable business, which is why so many Chinese merchants come to Myanmar every year to buy our finest jade,” the MGE official said on condition of anonymity.

“Local traders have been getting higher prices than they expected because of strong competition among Chinese buyers,” he added.

Gem emporiums are one of Myanmar’s biggest foreign currency earners. According to the Customs Department, Myanmar made US$297 million from jade and gem exports in the 2006-07 financial year ending March 31, almost 45 percent more than the $205 million earned during 2005-06.

The MGE’s gem and jade emporiums, which have been growing in size and frequency in recent years, averaged only about 500 foreign merchants three years ago but now regularly attract more than 4000 traders, the MGE official said.

The enterprise’s most recent emporium, a 13-day event in July, drew some 2200 Chinese merchants who helped the MGE achieve what it said was its largest ever sale both in terms of money made and quantity sold.

The MGE's next emporium in October is expected to be bigger still, the official said.

The big drawcard at these auctions was the jade on offer, not the gems, he added. At the July 4-16 emporium, only 47 out of 246 jade lots were sold, down from 47 gem lots sold at a similar sale in March.

Officials have attributed the decline in gem sales to a cooling off of the Thai market, which has traditionally been the biggest buyer of Myanmar gems.

The MGE has been trying to drum up interest in the country’s precious stones by encouraging traders to present their finest rubies at state-run auctions.

Under the 1995 Myanmar Gemstone Law, local traders are allowed to sell value-added rubies and sapphires at private gem shops, but the MGE says doing so has resulted in lower-quality rubies being offered at the state-run emporiums.

The MGE official said the enterprise has been making an effort to point out to private-sector traders that they can access a wider market and earn more by providing lots at the government enterprise’s sales.

Top-quality rubies, in particular, had the potential to fetch higher prices due to competitive bidding at MGE auctions, he said.

“If they (local traders) present high-quality gemstones at the emporiums, it will attract more foreign traders and that means a likelihood of higher prices and more gems sold,” the official explained.

He added that the establishment of the Gems and Jewellery Entrepreneurs Association, currently awaiting government approval, would help the gems sector expand by organising traders under a single banner and facilitating the spread of market information more effectively. More than 200 mining and gem retail businesses have already signed on to join the group.

“The forming of an association like this is helpful for traders because they will be able to discuss changes in both the local and international markets and arrange for members to visit other countries for further studies in fields like gem-cutting and polishing,” he said.

Most of Myanmar’s jade is found in Kachin State and Sagaing Division, while rubies come mainly from Shan State and Mandalay Division.

Recent flooding at the country’s top jade-producing town of Phakant, Kachin State, has had little impact on mining activities there due to a slowing of operations anyway during the wet season, the official said.

In April this year, the MGE announced it would award 319 new single-acre jade blocks to private miners by the end of July.

Meanwhile, the well-connected Union of Myanmar Economic Holdings Ltd (UMEHL) last month held a gem and jade sale for foreign and local buyers.

The August 21-25 sale at the MGE compound in Yangon featured about 2000 jade lots and 300 gem lots, according to a website run by the UMEHL.