Silver imports surged to a 3-month in October and are on track to achieve a record this year, Thomson Reuters GFMS data showed, as buyers opt for precious metal instead of expensive gold to meet the high seasonal demand.
Over shipments largest buyer around the world can help to sustain silver prices worldwide that have plummeted 37 percent so far this year – its biggest annual fall in at least three decades.
Silver imports surgeed 40% to 338 tonnes in October 241 tonnes in September, data showed GFMS, driven by the demand during holidays and wedding season starts from October tapering in early May next year.
“At the end of the year, imports of silver should be at 5.200 to 5.400 tons,” said Sudheesh Nambiath, analyst at Thomson Reuters GFMS. It would be more than high record shopping India 5048 tonnes in 2008.
The country imported 4,652 tons of silver during the first ten months of January, according to GFMS.
Traditionally, gold is used to give at weddings and festivals of India, but this year the metal has been made scarcer and more expensive for measures to reducing the trade deficit.
India has raised the import duty on bullion three times this year, bringing it to 10 percent, and says importers that a fifth of its purchases would have to turn to exports, leaving only 80 percent for domestic purposes.
The World Gold Council has forecast that China topple India from its position of largest consumer in the world this year of strict import regime bite gold.
Robust silver imports by India will continue till early next year, boosted partly by high rural demand as incomes rise after a good harvest, said an official with a private silver importing bank who did not want to be named due to company policy.
Prices of silver may recover to $ 26 an ounce, or 52,000 rupees per kg in March next year on demand from India, said Gnanasekar Thiagarajan, director with the broker Commtrendz Research.
“Silver has regressed more compared with the the higher gold rally, which would take the lead,” he said, referring with international prices.”
Gold is en route to his first annual loss in 13 years and is down 27 percent so far this year, well the drop in silver is trading below $ 20.
Reported: India Times