July/August 2003 • Little Luxuries : Emerging Gem Markets • Afghani Gem Trade More Dangerous Than Ever • Euro Halts E.U. Imports • Books: Tsavorite Garnet • News & Updates • In This Issue

From left to right: Blue sapphire, image courtesy ICA/Bart Curren; rainbow moonstone, image courtesy Thaigem.com; emerald, photo by John Parrish.

BRUSSELS, BELGIUM — In stark contrast to 2001, E.U. gemstone imports fell sharply in 2002, a drop in demand many blame on the changeover to the euro.

E.U. gem imports increased 15 percent in 2001 despite a chaotic world situation. Numerous negative factors had eaten into the U.S. gem market, resulting in a 20 percent drop. With 2001 proving such a successful year in the European Union, 2002 was more than just a little disappointing: The total for E.U. gem imports for the year was €340.2 million (US$321.1 million), down by 16 percent on 2001.

The year 2002 was a period of global economic and political instability, effectively bookended by the hangover of the September 11 attacks and the looming prospect of war in Iraq. There was also the added complication of a new currency being introduced into 80 percent of E.U. countries.

February 2002 saw the euro come into circulation as the sole currency in every E.U. country barring Sweden, the United Kingdom, and Denmark.

A comparison with gem imports is revealing. Of the 15 countries that make up the European Union, only four nations — Greece, Sweden, the United Kingdom, and the Netherlands — imported more gems by value than they did in the previous year. In the Eurozone, two of the biggest economic players, France and Germany, took major hits in 2002: France's imports fell 39 percent to €69.2 million ($65.3 million), while Germany's dropped 24 percent to €59.3 million ($56 million).

France was the biggest factor in the overall decrease in E.U. gem imports, especially its spectacular crash in ruby, emerald, and sapphire imports. The numbers went from €100.4 million ($90.3 million) in 2001 to €55.3 million ($52.2 million) in 2002, a drop of 45 percent.

"Just before the introduction [of the euro] a lot of people spent their cash while they had it," commented Emmanuel Piat of Paris dealer D.H. Piat. "Following [the introduction], of course there was a little slowdown in activity. Furthermore, it takes time for the public to get used to the value of their new money."

As Europeans waved goodbye to schillings, francs, marks and all the other old currencies, the largely smooth changeover wasn't without its cost. It is estimated that the cost to retailers alone was a considerable €11 billion ($10.4 billion) — around 1 percent of E.U. retailers' annual turnover — as they changed cash registers and accounting systems. There was also a widespread feeling among Eurozone consumers that many retailers had rounded up prices on goods in a bid to hide price increases behind an unfamiliar new currency.

Like retailers across the board, the jewelry sector couldn't hide from this slump.

The one exception to the general Eurozone gloom was the Netherlands, whose overall imports jumped 208 percent. The most dramatic increase was in the importation of cut "other" gems, going from €0.47 million ($0.44 million) to €2.5 million ($2.4 million). Consumers there seemed to be willing to try out the new, or at least the non-traditional.

Bouke Gillet, of Amsterdam's Tathata Gemstone Jewellery, found that many customers were taking to a somewhat less-than-established stone: "For us, the most popular stone is the rainbow moonstone, which comes from India. People very much like the shine of the stone — blue, yellow, and sometimes even orange."

Outside the Eurozone, the United Kingdom saw an increase in its imports of all cut gems. Ruby, emerald, and sapphire were up 18 percent to €54.6 million ($51.5 million), while other stones grew 21 percent to €33 million ($31.2 million).

While consumption seems to have been helped by the United Kingdom's failure to adopt the euro, it also appears that tastes are changing. According to Memory Stather of U.K.-based Designs from Memory, "Over the last four years I have felt that the British were not very interested in colored stones, but I think that may be changing. I certainly hope so."

While 2002 was a less than stellar year for the E.U. gem market, it seems worse when compared to 2001, which was an excellent year. In fact, the 2002 total was not too far off of 2000, which was a boom year across the world.

Dealers, therefore, are optimistic. "Colored stones are definitely coming back," said Piat. "Of course, sales aren't increasing much at the moment, because during a time of crisis [consumers] prefer to make 'safer' investments like [purchasing] diamonds . . . [but] designers will need color to create new pieces and to catch the interest of their clients."