In mid-September 2012, I visited the auction held by Paspaley, the largest producer of South Sea cultured pearls, to see exactly how these sales work. Such auctions are normally by invitation only, so it was a rare glimpse inside this part of the pearl world.
The harvest was divided into several dozen lots, based on quality factors; size, shape (roundness), luster and color. Most of the lots carried reserve prices, given in Japanese yen, total weight in momme (1 momme = 3.75 grams) and a quality designation (AAA, AA, etc.). Paspaley’s people matched some of the top-quality pieces into strands, several of which had undisclosed reserve prices.
During the one-day auction, invited dealers were given fifteen minutes to examine each lot on which they planned to bid. Those who wanted a very close look could leave a place card on the auction display and carry the lot to a back table—Paspaley’s staff was quite adamant about the fifteen-minute rule. After looking over the goods, the dealers completed bid forms, which they left in the “ballot box” at the end of the display table.
All of the bidders were pearl wholesalers from the U.S., China, Japan and Europe. The September auction, which included golden cultured pearls from producers in the Philippines, is typically the smallest of the company’s quarterly sales.
Pearl producers developed the auction system about thirty years ago because it was the most efficient way of getting goods to market and determining prices. Before then, Paspaley and others sold their production to the Japanese wholesalers who once dominated the market.