"The local companies were forced to close down as they were not able to compete with the low prices of imported pearls," said Saut Hutagalung, the maritime affairs and fisheries ministry`s director general for processing and marketing of fishery products, on the sidelines of a pearl festival on November 1.
Besides, due to the low quality of imported pearls in Indonesia`s markets, the price of Indonesian pearls in the world market is much lower than pearls from other pearl producing countries such as Australia.
In order to protect local pearl producers, Indonesia`s maritime affairs and fisheries ministry will issue a ministerial regulation on the quality control of imported pearls because many of them are below the Indonesian national standard (SNI).
"The ministry will speed up the drafting of a decree on the quality control of pearls imported by Indonesia," Maritime Affairs and Fisheries Minister Sharif C Sutardjo said when opening the "Indonesian Pearls Festival II - 2012" here on November 1.
The ministerial decree is aimed at protecting Indonesia`s pearl producers because cheaper, sub-standard pearls are negatively affecting the sales and pricing of local pearls.
The ministry`s director of product development, Maman Hermawan, said the ministerial regulation would ensure that the pearls coming into Indonesia will be meet SNI requirements.
"Hopefully, by the end of 2012, this regulation will in effect," he added.
Fresh-water pearl from China has reportedly entered the Indonesian market, particularly in West Nusa Tenggara and Bali.
Indonesia is the world`s eighth-largest south sea pearl (SSP) producer. Located between the northern coast of Australia and South China coast, the South Sea waters are home to a large population of oysters known as Pinctada maxima.
"These oysters grow up to a diameter of 12 inches, and can be nucleated with beads much larger than other marine shells, such as the Akoya," Maman noted.
SSP is produced from Pinctada maxima pearl oyster naturally as well as by culture. The country has several centres for the culture of Pinctada maxima: Tenggara, North Sulawesi, Southeast Sulawesi, Central Sulawesi, Maluku, North Maluku and Papua.
Indonesia` SSP has a unique colour and sparkle, due to which it is popular in the international market.
SSP is shinier, bigger and much more expensive than other pearls such as Akoya, Tahiti and fresh- water ones.
It is one of the largest varieties of pearls that can be commercially cultured. The average sizes of SSP are 12 mm and 13 mm, which are also the most popular.
The country has 27 large- and-middle-scale SSP-producing companies, which employ more than 8,000 workers, mostly in eastern Indonesian regions.
The government has also established a broodstock centre in Karangasem, Bali, in order to guarantee the quality of Indonesian pearls.
In 2011, Indonesia`s SSP production reached 6,300 kg, accounting for 53 percent of the world`s total production of 12,000 kg of SSP.
Pearl prices increase annually because the demand for pearls also rises every year. According to UN Comtrade data (2012), Indonesia`s pearl trade value reached US$31.8 million in 2011, while the global pearl trade value was recorded at US$1.5 billion.
There are 100 pearl traders in the country and some 5,000 small-scale pearl cultivators.
In 2010, the country produced 5.7 tonnes of pearls, about 95 percent of which was exported to Hong Kong, India, the Philippines and Japan, worth a total of approximately $30 million.
Total transactions at Indonesia Pearl Festival 2012, held from November 1-5, are expected to reach at least Rp10 billion.
"The committee has targeted Rp10 billion in transactions. However, it could reach much more than that, maybe around Rp30 billion," Saut said.
The festival is organised by the ministry in cooperation with the Indonesian Pearl Cultivation Association (Asbumi) and the ministry`s association of civil servants` wives.
"The pearl festival last year had a Maluku theme. This year, it is East Nusa Tenggara,ï¿½ Saut noted.
Asbumi chairman Anthony Tanios stated that a total of 34 pearl cultivators (who are Asbumi members) and nine provinces are taking part in this year`s festival. The nine pearl producing provinces are Bali, West Nusa Tenggara, East Nusa Tenggara, North Sulawesi, Southeast Sulawesi, Central Sulawesi, Maluku, North Maluku, and West Papua. Some 10,000 visitors are expected to attend the festival.
The South Sea Pearl auction, organized during the Sumbawa Pearl Festival in Mataram, West Nusa Tenggara (NTB), from June 29 through July 1, saw transactions worth a total of US$ 96,000. Buyers from 36 countries took part in the auction.
"The price of Lombok pearl rose from US$5 last year to US$16.3 per gram this year," said Bambang Setiawan, the deputy chairman of the Indonesian Pearl Cultivation Association`s Organization Unit.
"Lombok produces natural and best-quality pearls in the world, which have become very popular among tourists. West Nusa Tenggara Province produces around 600 kg of pearl annually," he noted.
NTB pearls, which come in 27 different colours, are exported to jewellery makers overseas, including in New York, Tokyo, Geneva and Zurich (Switzerland), and Milan (Italy). (*)