MUMBAI (Reuters) - India’s gold imports during peak demand season of September to December are likely to slump 40 percent on year to 200 tonnes due to weak monsoon, fewer wedding dates and near record high prices, the head of India’s leading trade body told reporters.
Poor monsoon rainfall is likely to hurt incomes of farmers and subsequently rural demand, Prithviraj Kothari, president of the Bombay Bullion Association, said on Tuesday.
India is facing its second drought in just four years, which can drive up food prices and erode spending power, crimping demand for goods from tractors to gold. More than half the population relies on the rural economy.
Investment and jewellery demand from Indian consumers plummeted 38 percent to 181.3 tonnes in the second quarter of 2012. Buying was hit by a hike in import duties and record-high local prices due to a weak rupee.
Reporting by Siddesh Mayenkar; Editing by Anand Basu