The length of the upswing in the Pearl market is obviously a very important question. However, the upswing is in its very early stages, so is unlikely to end soon. I don’t fully understand the recent history of the industry, but it appears that Japanese production has been declining for many years, with many farms going out of business. Covid prevented the movement of skilled Pearl farmers, further reducing output. And there have been environmental factors depressing production. Supply of higher quality pearls appears to be heavily constrained, consistent with the very high prices ATP achieved in the November auction for its grade A pearls. This auction also saw a substantial recovery in ATP’s Pearl quality, measured by the number of pearls exceeding 0.5 momme. Sustaining this recovery is probably just as important a factor as the macro background. Personally, I think price targets of low double digits are much too conservative, but that’s what makes a market!!
