It may take an oyster years to form a lustrous pearl, but just a few weeks for Sars to disrupt the global pearl supply.
The outbreak of Severe Acute Respiratory Syndrome has frightened away foreign buyers from Hong Kong and China's Guangdong province, which supply about 38 per cent of the world's pearls.
Chinese vendors have also been barred from several major exhibitions, resulting in a 40 per cent drop in the world's pearl distribution and sales, experts are saying.
"This is a big mess, the whole industry is being affected, definitely," said Sonny Sethi, president of New York-based pearl importer Tara & Sons. "I think the pearl industry will go down by 30 per cent this year because of Sars."
Asked about the impact on his profits, Mr Sethi said: "I don't think we are working for profit this year, all we are trying to do is stay above water."
The Sars outbreak in Asia has shocked the world's jewellery industry. China, which produces more than 1,000 tonnes of pearls, or 96 per cent of the world's annual total, is by far the world's largest pearl producer in terms of weight. Pearls from China are less expensive freshwater ones costing $10 to $1,000 wholesale per string. The more expensive, up to $10,000 per string, are Australian South Sea pearls and Akoya pearls from Japan and China.
Hong Kong has become the most important pearl manufacturing base because of its quality products and low labour costs.
Experts said it is too early to tell the impact of Sars on world prices for pearls because of various factors, such as the economy, affecting demand, but supply is likely to be reduced.
"Chinese companies are very important to the US market," said Devin Macnow, executive director of the Cultured Pearl Information Centre, a trade organisation in New York. "We estimate that by the third or fourth quarter, there will be 30 per cent less pearls in the general trade pipeline because of Sars."
As fear of Sars - which has killed nearly 500 people worldwide - grabbed headlines, Switzerland this month barred exhibitors from mainland China, Hong Kong, Singapore and Vietnam from the 2003 Basel world trade show, the largest jewellery show in the world. The order has banned 386 of the 786 exhibitors, with 317 from Hong Kong.
The OroAreezzo international gold, silver, and jewellery trade exhibition in Italy also cancelled all scheduled delegations from Sars-affected Asian countries. But the JCK Las Vegas Show, the largest US jewellery show set for June, said that, at least as of now, it will not be prohibiting exhibitors or those attending from Sars-infected regions.
Imperial-Deltah Inc., one of the top five US importers of Chinese freshwater pearls, is feeling the pinch. "Sars has created a lot of problems, we cannot go to Hong Kong and China and we won't be able to see new designs," said Banice Bazar, president of the East Providence, Rhode Island-based firm.
Unlike technology and clothing companies which are increasingly using video conferencing to clinch deals, jewellers still prefer the old-fashioned way of doing business.
"Dealers like to see with their own eyes before they buy, they want to look at the material, touch it, and negotiate a deal face-to-face," said the Pearl Information Centre's Macnow. "It's not something that you can get on the Internet, or via e-mail or fax."
Zale Corp., the largest US speciality jewellery retailer, said Sars has had no impact on shipments so far because it deals mostly with wholesalers instead of smaller vendors in the region. Upmarket jewellery retailer Tiffany uses more expensive pearls from Japan and Australia, and is unlikely to be affected, said analysts.
However, they said that if the situation continues, big firms at the top of the supply chain will also be affected, because most pearl producers in China are small farms which will turn to other businesses if they cannot sell for a while.
At least one US retailer is looking to take advantage of the situation. "It's a buyer's dream," said Jeremy Shepherd, owner of Pearl Paradise.com, who plans to visit China soon despite the Sars outbreak.
"I am getting all the capital that I can to buy enough pearls for the entire holiday season, then I will be able to drop my price greatly," he said, adding that he expected profit and sales to more than double to $1 million and $5 million respectively this year.