Of Ivory, Gold and Silver

By Brendan Moyle 03/03/2015


It is a persistent problem with the illegal ivory market, is we don’t have actual records of how much is being sold.  It is difficult to determine what the size of the market for carvings, what proportion are new carvings from recently poached ivory, what percentage are fake ivory, and what percentage is older carvings being resold.  One thing our recent paper on ivory laundering in Chinese factories discovered, is that there is a correlation between ivory sales, and sales of ‘gold, silver and jewelry’ in China.  In some ways this is not a surprise.  Some factories produce a range of products, including silver and gold items.  Some retail stores also sell these products. So in principle, we can use the sale of these items to make some deductions about the ivory market.

 

Now the correlation isn’t one for one.  But I think it’s still useful to look at the gold, silver and jewelry sales in China (Figure 1).

Source: Bloomberg Series chsagsje
Source: Bloomberg Series chsagsje

The first thing this shows us is that the period of rapidly increasing poaching in Africa (2009-2011), spending on gold, silver and jewelry in China basically tripled.  Since then the growth rate has slowed. Since its peak at the end of 2012 and the beginning of 2013, growth in spending has stabilised or declined. This is the same story we have been getting from our surveys in China over 2013 and 2014.  The growth in demand for ivory hasn’t been occurring.  This was corroborated by the information provided in Hangzhou by the ivory-carving industry.

Another useful observation is that retail sales of these products tend to peak around January.  The reason is actually quite simple.  This is the period of the Chinese New Year, which prompts higher spending.  This contains another lesson.  When researchers survey markets in China will matter.  Making observations in months consumer spending is high may bias conclusions towards a generally high demand for ivory.  This demand will not be sustained outside these months.