Are Burma Ruby Prices Justified?

Not long ago at a speaking engagement, I made the following example and the crowd was completely shocked. A “perfect” diamond would be designated as D color and flawless clarity by GIA. If the same diamond has the absolute finest dimensions and cut, it would further obtain a triple X grading by GIA making it truly the best of the best. Take a 10-carat example of such a diamond and assume that it’s a round cut (since its traditionally the most expensive per carat). It was mentioned to the audience that such a diamond may command US $1.5 million in total on the wholesale level. In contrast, a 10-carat Burma natural ruby can easily command US $4-6 million in total. What is shocking is that this same ruby may have strong visible flaws and seem like rather ordinary quality to the lay person. Therefore, a super fine 10-carat Burma ruby can easily fetch prices upwards of US $10 million.

It is not surprising then that one of the most common questions this writer has been fielding recently has to do with the incredible rise in fine ruby prices. The polite ones among them ask whether this is a temporary economical phenomenon. The cynical ask if this is some kind “man-made,” artificial shortage- Think De Beers of the 1980’s with diamonds. More than a few clients have explained that they would like to wait for ruby prices to drop before they make a purchase. To truly appreciate ruby prices, one must start from the beginning…economics-101 if you will.

The Supply

Corundum is the base mineral that makes up sapphires and rubies. What is amazing is that pure corundum is actually colorless, a bit like a white diamond. In very rare cases, secondary trace elements infuse into the corundum and give it gorgeous colors. The knowledgeable consumers are aware that a sapphire can naturally occur in every color of the rainbow because different trace elements can infuse mining sites that produce corundum. Such non-blue sapphires are collectively called “fancy” color sapphires within the trade.

It is even more rare for chromium to sneak into corundum and give it a red hue. In fact, speaking casually, one may describe rubies as red sapphires. This combination of chromium within corundum occurs so infrequently that the red variety of sapphires received its own name and was designated as “ruby” long ago. The Gemological Institute of America (the absolute world benchmark for such matters) requires the main color in corundum to be red to be gemologically referred to as a ruby. But to fully appreciate a fine ruby’s rarity, one must become familiar with its countries of origin and the actual number of geographic locations which have been blessed with examples in fine color and quality. ?

There have been rubies mined in countries like Thailand and Vietnam for centuries. More recently, very small deposits have been discovered in other sites like Afghanistan and even Greenland. However, we must never forget what the preeminent determination of the value of a precious color gemstone is- it’s color. Rubies are very rare. But even when they do naturally occur, most of the production and yield at the above sources contain secondary colors that detract from its value. Tinges of purple, raspberry, brown etc. may be beautiful to the beholder but fine rubies must have a purer red with weak secondary colors in the red family such as shades of pink. It’s a term that’s certainly over used but the finest color rubies are referred to as “pigeon’s blood.” It may be an unattractive description to use but for centuries, miners who would count pigeon’s as one of their stable food sources associated the color of blood with truly stunning rubies. What is amazing is that this particular variety of pigeon’s blood ruby is exclusively found in the beautiful country of Myanmar (Burma.) Not only has it been exclusive to this country for centuries but in fact the ruby mines are contained within the small region of Mogok. Imagine the rarity!

The gem world was stunned to learn of super fine quality ruby discoveries in the country of Mozambique. Rubies were first discovered there some 20 years ago and the gemstone world was collectively grasping at the possibility of finding a Burma alternative. Gorgeous examples of Mozambique rubies could come close to the fabled pigeon’s blood color and numerous global jewelry houses endorsed the gemstone as it was more easily obtained. The country of Mozambique proved to be much more receptive than Burma to international buyers. Coupled with their more prolific mines that produced gorgeous natural rubies, Mozambique quickly became a force to be reckoned with. However, advancements in gemological research have now discovered that there is another layer, a secret sauce if you will, that makes Burma rubies absolutely unique among its peers. Rubies from Burma are the only ones that have naturally occurring fluorescence. This phenomenon causes a gemstone to reflect back a blue tone under UV light testing. We have now learned that this unique layer of optics, mixing with pure red, is what gives Burma rubies their much-prized color. This is why Burma rubies are utterly unique and to gem connoisseurs, without peer.

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The Demand

High end consumers and certainly gemstone collectors are a knowledgeable bunch. Of course, many buy certain color gemstones for subjective reasons. Nothing is as important as purchasing a gemstone you love and will enjoy wearing. But armed with the knowledge of its rarity, many international consumers have chosen to seek fine Burma rubies. Such buyers are fully aware of how rare and irreplaceable a fine Burma ruby is. The essence of collecting is to obtain what is difficult to find and the number of buyers for such rubies has steadily increased over the years.

However, the strongest demand pressure for fine rubies has come from the stunning rise of the Chinese luxury consumer. At no time in history has there been such a large and sudden rise in luxury consumer wealth as we have recently seen in China. As luck would have it, the color red is associated with good fortune, luck and joy in the Chinese culture. Topping the wish list for every high-end Chinese consumer is a red gemstone and they have quickly learned that the queen of such precious color gemstones is the Burma ruby. Many opt for more readily available and less expensive varieties of red gemstones. The ones in the know may purchase large Mozambique beauties but for the Chinese consumers who have the means and patience, a Burma ruby is the ultimate status symbol. This massive group of buyers are relatively new and by all accounts, have only started to make their mark on the world stage. We can expect China’s buying power and influence in the luxury market to only increase in the decades to come.

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Conclusion

Fine rubies are extremely rare. Their rarity is completely real and not in any way “man-made” or the product of glossy marketing. The complex recipe for such gemstones makes it very unlikely that examples of fine rubies will be replicated in other locales and in quantities as to disrupt the market. Fine Burma rubies have yet another layer of color complexity and natural rarity which make replicating them in other locales nearly impossible. Further, they have been prized for so long that one may even think of Burma as a brand name for rubies. Even though we may experience insignificant vicissitudes in pricing once in a while, economics-101 and simple supply and demand prove without doubt that ruby prices can only go up in the long term.

Rodney Rahmani is President of Brilliant Stars and a 3rd generation International Gemstone Merchant. He is considered a leading authority in the subjects of gemstones, jewelry, mineral economics and the global luxury consumer market. He is a noted speaker and author of many articles on these subjects. He may be reached at [email protected]

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