GemSelect Newsletter - November 2007

Gem Dealers at Chathaburi's Gem Market

Many people who visit Thailand shop for gemstones in Bangkok. But very few people have the chance to see where many of the Thai gem dealers buy their gemstones. For that you need to travel 250 kilometers south east of Bangkok to our home of Chanthaburi. This small city of about 50,000 people is the major processing and trading center for colored gemstones in Southeast Asia. It is estimated that 80% of the world's supply of ruby and sapphire passes through Chanthaburi.

Chanthaburi was once famous for its ruby and sapphire mines. The mining business reached its peak in the 1960s and 70s when political events in Burma reduced the supply of Burmese ruby to a trickle. The demand for Thai gemstones was so great that by the 1980s the local mines were worked out. The gem business in Chanthaburi might have died along with mining, but the gem factories here had developed new techniques for heating gemstones to improve their color and clarity. When the local supply of ruby and sapphire started to disappear, traders began to bring colored gemstone from all over the world to be processed in Chanthaburi.

Gemstone processing in Chanthaburi is largely a cottage industry. Though there are a few large companies, most of the work is done by smaller family-owned businesses. Their expertise is in grading, cutting and polishing gemstones, not in marketing their product to the world. So a local market has developed to help the Chanthaburi factories get their gemstones into distribution. For those in the know, this market has some of the best deals in colored gemstones in the world.

The Chanthaburi gemstone market, known in Thai as the talad ploy, is open every Friday, Saturday and Sunday, from about 11 in the morning to about 6 in the evening. The main part of the market is in a narrow set of lanes at the intersection of Si Chan Road ("Gems Street") and Tessaban Road. This neighbourhood is full of retail shops for gemstones and gemstone equipment (scales, loupes and the like). During weekdays, this area seems fairly quiet, but the weekend gems market is a whole new world of activity. The talad ploy is a public market where anyone can come to buy and sell. If you visited the market for the first time, you probably wouldn't know where to begin. This is not a market where dealers display their wares and buyers browse through the goods. The commercial model here is entirely different from the local produce market a few blocks away. At the talad ploy, the buyers occupy the trading desks and the sellers circulate through the market looking for buyers.

Open Gem Sales Office in the Center of the Market

So let's say you wanted to buy some sapphire at the market. The first thing you need to do is find a place a sit. You'll see a number of storefronts, many of them open to the street, with desks and chairs. These are trading offices and they'll be happy to provide you with space for your trading. The trading offices make their living by earning commissions on every sale. You won't know exactly what the commission is, since it's paid by the seller. In the most popular spots, it could be as high as 15%. Just remember that the commission will be included in the price you will pay for any gems you buy.

The next thing you need to do is let the market know what you want to buy. This is done by posting a sign (in Thai of course) on the window of the trading office or to the front of your trading desk. Sometimes the signs are fairly general, such as "tourmaline and spinel". But very often you will see buyers looking for sapphire in a specific color and size or weight.

Gem Wish List Outside the Offices

Sellers who have gemstones that meet your requirements will stop by and show their goods.

The sellers are fairly easy to spot in the market - they are the people with shoulder bags worn securely across their chests. Inside those bags are gemstones that may be worth several hundred thousand dollars. You might be surprised at the unassuming appearance of these sellers, dressed in T-shirts, jeans and sandals. Are these really the wealthy gem dealers of Chanthaburi? In fact they are only brokers, acting as the legal representatives of the gem owners, who rarely make an appearance in the market.

The brokers will show you what they have to offer and can answer questions about the goods, assuming you can speak enough Thai to ask. They will state an asking price, but the final price may well be only 40% of the initial price, so you'll need very good negotiating skills to strike a bargain. If you make an offer on some gemstones that the broker thinks might be acceptable to the owner, the gemstones will be wrapped up and taped securely with your name and price, and the broker will disappear to consult with the owner by phone. You'll usually get your answer within the hour. If you've offered a low price for the gemstones, you may get lucky if the owner has done well on other gemstones from the same lot or needs to raise some cash quickly.

Gem Buyers and Brokers in a Typical Office

Eventually you'll get hungry, and this being Thailand, there are many food sellers right in the market. You'll see many of the same street stalls you see all over Thailand - noodle soup, chicken or pork over rice, fresh local fruit and interesting sweets. You definitely won't go hungry.

The final stop on our tour is a new gem trade center a few blocks away. This modern air-conditioned building has an open trading floor and a number of private rooms. It even has a gemological lab on site where you can get identification reports within an hour or two. This clean and inviting environment looks to be the future of the gems market in Chanthaburi. But where are the buyers and sellers? The half empty trading floor stands out in stark contrast to the crowded streets of the old market. Traditions die very slowly in Asia, and despite the heat, dust and crowds, the gem traders prefer the atmosphere of the old quarter.

We are always looking for ways to make it easier for our customers to find what they're looking for on our website. Since we've recently added a large number of interesting gemstone pairs and lots, we made some changes so you can find them more easily:

1. On our home page, you'll see 2 buttons labelled "pairs" and "lots." Clicking on these buttons will show you all of our pairs (or lots) listed by gem type.

2. When you're browsing a gem page such as sapphire or tourmaline, you can use the tick boxes to view just the pairs or lots for that gem type.

3. On any page, you can use the search box and look for "spinel pairs" or "tourmaline lots", for example.

Each month we focus on one of the lesser-known gemstones. This month's featured stone is peridot.

Peridot from Burma

Peridot is one of very few gemstones found only in one color. That's because the green of peridot comes from the basic chemical composition of the material itself (magnesium iron silicate) rather than from minor impurities.

The bright yellow-green of peridot is quite unique in the gemstone world. Peridot is a historically important gem. It is mentioned in the Bible and legend has it that peridot was the favorite gemstone of Cleopatra. Fine peridot is sourced from a number of locations, including Pakistan, the USA, Burma, China and Vietnam.

To see our selecion of peridot gems click here.

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Happy Gem Hunting!
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