Apparently many pencils are yellow as a result of an ingenious marketing trick. In 1889 the Austrian company Hardtmuth introduced a new line of fancy pencils at the World Fair in Paris. The pencils were called Koh-i-Noor in honor of a famous Indian diamond and contained the finest graphite that existed, coming from the East. They were painted yellow, something quite unusual for the time.
According to some historians, the Austrian company painted its yellow pencils as a subtle nod to the yellow of the Austro-Hungarian flag. Others claim that yellow refers to the oriental origin of graphite: in China the color yellow is associated with royalty. In any case those new yellow pencils were a success, and soon other manufacturers began to paint their yellow pencils in an attempt to get a part of Hardtmuth's marking.
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