Industry Observation
As 2024 begins, the global jade rough market once again turns its attention to its primary source – Myanmar. A series of policy adjustments, coupled with geopolitical complexities, are profoundly impacting every stage from mine extraction to international trade.
Policy Tightening, Supply Side Under Pressure
For a long time, the Phakant region in Kachin State, northern Myanmar, has been the source of over 90% of the world's high-quality jade rough. However, since 2021, the Myanmar government's regulation of mining has become increasingly stringent. According to the latest data from the Myanmar Ministry of Mines, by the end of 2023, more than 150 small mining enterprises had their extraction licenses expire without renewal, and approximately 50 large mining enterprises faced strict environmental reviews. This measure aims to regulate disorderly mining and combat illegal smuggling, but it has undoubtedly exacerbated the tension in the supply of rough jade in the short term.
“We anticipate that within the next year, the supply of jade rough entering legitimate channels will decrease by at least 15%,” said Chen Zhiqiang, Vice President and Secretary-General of the Ruili Jewelry Association in Yunnan, in an interview with our newspaper. “This has directly led to price increases for mid-to-high-end rough. For instance, a medium-grade 20-kilogram 'old pit glass' jade rough, which sold for approximately $500,000 at the public auction in early 2023, saw similar quality rough estimated at over $650,000 at the latest auction held in Yangon in April this year, an increase of over 30%.”
Changes and Challenges in the Public Auction Model
The Myanmar Jade Emporium, led by the Myanmar government, has always been the main channel for rough jade trading. However, in recent years, both the frequency and scale of these auctions have been affected. In 2023, only two large public auctions were successfully held, with a total transaction volume of approximately $320 million, a significant decline from $450 million in 2019. Although the Yangon auction in April 2024 showed some signs of recovery, attracting nearly 2,000 buyers from China, Thailand, Singapore, and other countries and regions, the transaction rate and overall premium level were still below expectations.
“The transparency and predictability of public auctions are key to attracting international buyers,” said Mr. Li, a veteran Hong Kong jade trader who wished to remain anonymous. “Frequent policy changes and geopolitical uncertainties make many international investors cautious about large investments. They prefer small-batch, high-quality spot transactions to mitigate risks.”
Undercurrents of Illegal Trade and Smuggling
While legitimate channels face obstacles, illegal mining and smuggling activities in border areas are becoming increasingly rampant. According to a joint report released by INTERPOL and Myanmar border security departments, the number of illegal jade rough smuggling cases seized along the China-Myanmar border increased by 25% in 2023, with a total value amounting to tens of millions of dollars. These illegal rough stones bypass government regulation and taxation, entering the market at lower prices and impacting legitimate trade.
“Cracking down on illegal smuggling is crucial for maintaining market order and protecting resources,” said a representative from the China Yunnan Border Management Corps. “We are strengthening cooperation with Myanmar, using technological means and intelligence sharing to improve interception efficiency.”
Strong Market Demand, Chinese Buyers Maintain Dominance
Despite numerous challenges on the supply side, global demand, especially from the Chinese market, for high-quality jade remains robust. In 2023, mainland China and Hong Kong remained the largest buyers of Myanmar jade rough, accounting for over 70% of the market share. With the gradual recovery of the Chinese economy and consumers' increased awareness of the investment value of rare jewelry, demand for exquisite jade is expected to remain strong in the coming years.
“Currently, we observe strong domestic market demand for high-quality, collectible jade finished products, which in turn drives up the expected price of rough stones,” said Ms. Wang, a senior merchant at Guangzhou Hualin International Jewelry City. “Especially rough stones with rare colors, such as imperial green and 'spring with color,' are in high demand even at high prices.”
Outlook: Finding Balance Amidst Volatility
In the future, the Myanmar jade rough market will continue to be full of variables. The direction of government policy, the evolution of geopolitics, and changes in international market demand will all be important factors influencing its development. For industry participants, navigating risks and seizing opportunities amidst volatility will be a core challenge in the coming period. Strengthening industry self-regulation, promoting supply chain transparency, and exploring new trading models may be effective ways to address current challenges.