A woman inspects ruby rings at the Myanmar VES jewellery shop in Mayangone township, Yangon, on October 17. Pic: Aung Tun Win

THE state-run Myanma Gems Enterprise is expecting a good turnout and strong sales at its mid-year emporium next month despite moves to block Myanmar’s gem and jade trade to Europe and the United States, an MGE official said last week.

Private sector traders in Yangon also said Myanmar’s international gem and jade trade would remain healthy even with new sanctions imposed by the European Union last week, pointing out that the bulk of exports go directly to Asian markets rather than the West.

“We have a lot of clients from China, (South) Korea, Japan and Singapore, as well as some from Europe and the US. French merchants are the top buyer among Westerners while Japanese are biggest buyers from Asia,” said Daw Chaw Su Win, sales executive for Myanmar VES Joint Venture Co., Ltd, formed by the MGE and Thailand’s VES Group in 1992.

“In our experience, they can’t stop themselves from buying top-quality Myanmar gems because they can earn hefty profits trading them compared to what they can get with gems from other countries,” she said.

“I don’t think there will be any particularly severe effects.”

EU foreign ministers on October 15 approved new sanctions against Myanmar, including an embargo on the export of wood, gems and metals.

The move came a week after American jewellers asked US authorities to plug a legal loophole allowing gems mined in Myanmar to be sold in the United States.

Myanmar-mined gems are exported to the US by third countries such as Thailand, where the precious stones are cut and polished for jewellers – an effective way of skirting US sanctions that prohibit direct imports from Myanmar, industry sources said.

Even though the import ban does not currently specify gemstones, the US Customs and Border Protection created an apparent loophole by ruling in 2004 that gems mined in Myanmar but cut or polished in another country could be allowed into the United States.

Jewelers of America, a group representing 11,000 member stores including Cartier, Tiffany and Co. and Zale Corp., sent a letter to US Congressional leaders on October 10 asking lawmakers to specify Myanmar-mined gemstones in the import ban.

However, Myanmar gem traders said the industry here was not panicked by the US threat or EU action.

The MGE official, speaking on condition of anonymity, said raw gems from Myanmar that were cut, polished or made into jewellery in Thailand do not carry a certificate of origin when forwarded to third countries for sale to end users. If this practice continues, international merchants will still be attracted to Myanmar gems, he said.

Stella Lee, chief of the Hong Kong-based American Gems Laboratory, told US media on October 16 that Western authorities would have a tough time proving where gemstones have come from.

“It is impossible to identify the exact origin of particular gems even by examining them in a lab. And Myanmar’s gems, especially rubies, are the most popular in the world. So I think the actions this time will be ineffective too,” she said.

U Aung Kyaw Zin, director of SP Gems, one of Myanmar’s leading jewellers, said the US market was not of much importance to Myanmar exports, though he pointed out that up to half of jade and gemstones mined here eventually made their way onto shop shelves in European countries.

“The biggest and most decisive market for Myanmar is not the US – it's countries like India, China, Japan and some European countries,” he said.
“It is very certain that merchants won’t be able to turn their backs on Myanmar gems because they can make so much money from them. Myanmar gems’ superior quality will see us through this situation.

“Merchants in Yangon aren’t panicking because they are confident the quality of their products will never fail them,” he added.

Another Yangon-based gems trader with more than 30 years’ experience said demand consistently outpaced supply and the potential loss of the American market was not cause for alarm. He said, however, that European customers accounted for up to half of end-user sales of Myanmar-mined gems and jade, usually after they passed through Asian countries in transit.

Still, the MGE official said next month’s gem and jade emporium in Yangon was expected to set yet another record for jade earnings following consecutive record-breakers in March and July.

About 2000 foreign merchants were expected to attend the auction, he said, which is likely to attract a further 1000-2000 Myanmar traders.

Most foreigners at government-run sales are Chinese, who purchase raw jade in bulk. The official said this jade was mainly resold as finished products in markets in mainland China, Hong Kong and China (Taipei).

The popularity of jade items commemorating the 2008 Beijing Olympics had pushed up China’s demand for Myanmar jade over the past year, he added.
“Western gem traders who come to the emporiums are not regular buyers of our finest jade and gemstones. As such, sales of jade and gemstones at the emporium will be good,” he insisted.

A senior official with the state-run Myanmar Pearl Enterprise also said he did not expect pearl sales at the MGE auction to be affected by the EU embargo.
“Our customers are mostly from Asia, so a boycott by Western traders on Myanmar jewellery will not affect the gem emporium,” he said, asking not to be named.

The MGE official said the enterprise had been forced to scale down its expectations for the number of jade lots at the coming sale because poor weather was discouraging some miners from transporting jade blocks from Kachin State to Yangon.

“So I think the number of gem and jade lots that will be displayed at the mid-year emporium will not much exceed that of the previous emporium,” he said.
More than 4300 jade lots were sold in July out of 5880 on offer.

To give miners more time to deliver jade to Yangon, the mid-year emporium was postponed from November 7-21 to November 14-26.