Silver imports surge 40 pct in Oct, hit three-month high

MUMBAI Tue Dec 3, 2013 12:01pm IST

A silver trader displays silver ornaments inside his shop in Ahmedabad April 27, 2011. REUTERS/Amit Dave/Files

A silver trader displays silver ornaments inside his shop in Ahmedabad April 27, 2011.

Credit: Reuters/Amit Dave/Files

Related Topics

Rajalakshmi (C), 28, smiles after winning the Miss Wheelchair India beauty pageant in Mumbai November 26, 2014. REUTERS/Danish Siddiqui

Miss Wheelchair India

Seven women from across India participated in the country's second wheelchair beauty pageant, which aims to open doors for the wheelchair-bound in modelling, film and television, according to organisers  Slideshow 

MUMBAI (Reuters) - India's silver imports rose to a three-month peak in October and are on track to hit a record this year, data from Thomson Reuters GFMS showed, as buyers opt for the precious metal instead of expensive gold to meet high seasonal demand.

More shipments by the world's top buyer may help underpin global silver prices that have slumped 37 percent so far this year - their biggest annual drop in at least three decades.

Silver imports jumped 40 percent to 338 tonnes in October from 241 tonnes in September, GFMS data showed, driven by demand during the festivals and weddings season that starts from October and tapers off by early May next year.

"By the end of the year, silver imports should be at 5,200-5,400 tonnes," said Sudheesh Nambiath, an analyst with Thomson Reuters GFMS. This would be more than India's record high purchases of 5,048 tonnes in 2008.

The country has imported 4,652 tonnes of silver in the first ten months from January, GFMS data shows.

Traditionally, gold is used for gifts at Indian weddings and festivals, but this year the metal has been made scarcer and dearer by measures aimed at cutting the country's trade deficit.

India has hiked the import duty on bullion three times this year, taking it to 10 percent, and has told importers that a fifth of their purchases would have to be turned around for export, leaving only 80 percent for domestic use.

The World Gold Council has predicted that China would topple India from its position of the world's top gold consumer this year as the strict import rules bite.

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.

Silver prices may recover to $26 an ounce or 52,000 rupees per kg by March next year on Indian demand, said Gnanasekar Thiagarajan, director with broker Commtrendz Research.

"Silver has retreated more compared to gold and while rallying higher, it would take the lead," he said, referring to international prices.

Gold is on track for its first annual loss in 13 years and is down 27 percent so far this year, lagging the drop in silver that is currently trading below $20.

(Editing by Himani Sarkar)

FILED UNDER:

SAARC Summit

REUTERS SHOWCASE

E-Commerce Boom

E-Commerce Boom

Online grocers come up trumps in India's e-commerce boom   Full Article 

Reuters Poll

Reuters Poll

GDP growth to slow to 5.1 pct, but no rate cut yet  Full Article 

Oil Prices Fall

Oil Prices Fall

Oil at four-year low as OPEC production cut looks unlikely  Full Article 

Google in Europe

Google in Europe

Insight - Behind Google's Europe woes, American accents  Full Article 

Vodafone Tax Dispute

Vodafone Tax Dispute

India advised against challenging Vodafone tax ruling - source  Full Article 

India-focused Funds

India-focused Funds

India-focused hedge funds up over 40 pct YTD - HFR  Full Article 

Trade Deal

Trade Deal

WTO postpones trade deal by a day after last-minute objection.  Full Article 

RBI Rate Hopes

RBI Rate Hopes

Markets pricing in rate cut, despite wary RBI  Full Article 

Land Disputes

Land Disputes

Disputes over land for industry on the rise in India, angering locals - charities  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage