India's Silver Imports Follow Gold, Fall by 50%
Source: Commodity Online (4/2/09)
"Traders say demand for silver these days is largely met by scrap that has warded off fresh imports."
A few years back, India used to consume around 3,000-4,000 tonnes silver a year. India's biggest demand for silver comes from rural India, where agricultural output is determined largely by the June-to-September monsoon.
According to provisional figures from the Bombay Bullion Association (BBA), silver imports by India have plunged by at least 50% compared to previous years. The association that tracks bullion market in India said on Monday that gold imports to the country stood at zero level in March thanks to high prices and falling sales thanks to the global economic meltdown.
Traders in India feel that silver prices have gone up drastically in the past few weeks and at any moment it can crash and they may have to suffer losses.
In the recent past, silver prices have risen sharply raising doubts about its future trend. Only a considerable fall in silver prices can bring consumers back into the market. Silver prices had gone up more than three times to 27,500 rupees per kg last year from 8,000 rupees per kg in 2003. Currently, silver prices continue to be around 21,968 rupees.
According to experts, silver imports have virtually halted from the beginning of the year. Sharp jump in prices has seen more metal coming into the resale market, which has been recycled and sold in open market.
In the last two months, over 100-150 tonne of recycled silver entered the market. While import of gold has slowed down in the last quarter of 2008, silver imports have recorded big jump during the period.
Traders say demand for silver these days is largely met by scrap that has warded off fresh imports.