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Indians Selling Their Silver, Imports may Fall

Indians Selling Their Silver, Imports may FallNeal Bhai Reports — Indians Selling Their Silver, Imports may Fall — A sharp rally in silver prices since the beginning of this year is likely to halve imports of the precious metal as consumers in India are offloading good quantities of silver to take the benefit of rising prices.

Silver, which fetched ` . 36,000 per kg during this time last year, is now available at ` . 46,000 per kg.

“The market is flooded with old silver as people want to take advantage of this price rise,“ said Mukesh Kothari, director of Mumbai-based RiddiSiddhi Bullions. “We do not see a steep hike in silver prices from this level in coming months. Urban as well as rural consumers are selling household silver. As a result, there is a huge supply of silver in the market though the demand for the metal is not going up. Even banks are holding good volumes of silver with them.“

While the entry of recycled silver in the market is hurting imports, traders who had imported silver in the past are also booking profits, which is likely to affect imports further. India has imported only 2,111 tonne of silver between January and July this year, less than half of 4,362 tonne imported during this period last year. In all, the country had imported 7,759 tonne of silver in 2015.

“Those jewellers who had stocked silver in the beginning of the year based on better monsoon forecast are not being able to sell the metal to rural India right now,“ said Haresh Acharya, secretary, Bullion Federation.

The demand for silver can start picking up only after the kharif crop is harvested, which will be over in October and November.“Since there is good stock in the market, we do not see a trigger for a sudden rise in silver imports in the second half,“ Acharya added.

In this situation, silver imports can only increase if industrial demand for the metal goes up.Silver is used in batteries, LED chips, glass coating, RFID chips, semiconductors, and touch screens. Globally, over half of silver is used for industrial purposes. But in India, only an estimated 20% is used by industries.

Interestingly, jewellers are pinning hope on Indian consumers channelising the profits earned from silver into gold in the upcoming festive seasons. “We are hoping that a portion of the profit earned from silver will go into purchasing of gold, mostly in rural India,“ said Prabhat Agarwal, a jeweller in Chhatarpur village of Madhya Pradesh. Gold consumption is likely to be 750850 tonne this year, according to World Gold Council. Rural India accounts for nearly 60% of the country’s total gold consumption. — Gold Silver Reports

Indians Selling Their Silver, Imports may Fall

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